It’s another green morning on Wall Street as all three major indices opened higher. There is no sign of fear much less panic after the Shanghai index crashed over 12% briefly for one minute and rallied all the way back. In this article, we analyze five stocks that are trending this morning, including ConAgra Foods Inc (NYSE:CAG), Mondelez International Inc (NASDAQ:MDLZ), Monsanto Company (NYSE:MON), Starbucks Corporation (NASDAQ:SBUX), and Viacom, Inc. (NASDAQ:VIA), and see how hedge funds are positioned in each stock.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
ConAgra Foods Rises on Barron’s Write-up
ConAgra Foods Inc (NYSE:CAG)’s stock has inched up by nearly 2% after Barron’s had published a bullish article on the stock. In the article, the writer stated that ConAgra could rally 30% over the next few months as the company improves its existing brands, cut costs, and sheds some non-core businesses. Seeing as ConAgra sold its Spicetec Flavors & Seasonings brand for $340 million in May, some investors believe the company could do more asset sales that could unlock the value of the shares. New CEO Sean Connolly plans to cut $300 million in yearly expenses and could be preparing the company for an outright sale. ConAgra and JANA Partners also amended their cooperation agreement where the company agreed to nominate JANA picks Timothy McLevish and Bradley Alford for board seats. JANA Partners, managed by Barry Rosenstein, owned more than 21 million shares of ConAgra Foods Inc (NYSE:CAG) at the end of March.
Mondelez Going More Mobile
Mondelez International Inc (NASDAQ:MDLZ) is thinking more outside the box to boost sales. The company is reportedly developing more mobile applications that feature its products to promote brand loyalty and increase sales. Mondelez’s existing mobile app which features the company’s famous Oreo cookies, ‘Twist, Lick, Dunk’, has been downloaded around seven million times since its introduction three years ago. The game has also paid for itself twice over, with the ads and in-app purchases offsetting the development costs by more than double. If the mobile gaming route is a success, Mondelez International Inc (NASDAQ:MDLZ) could feasibly save some money by not advertising as much. Bill Ackman’s Pershing Square owned slightly over 22 million shares of Mondelez at the end of the first quarter.
On the next page, we examine Monsanto Company, Starbucks Corporation, and Viacom.