The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Mondelez International Inc (NASDAQ:MDLZ) and determine whether the smart money was really smart about this stock.
Hedge fund interest in Mondelez International Inc (NASDAQ:MDLZ) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MDLZ isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Altria Group Inc (NYSE:MO), Zoom Video Communications, Inc. (NASDAQ:ZM), and Becton, Dickinson and Company (NYSE:BDX) to gather more data points. Our calculations also showed that MDLZ isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Nelson Peltz of Trian Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock.. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let’s take a gander at the fresh hedge fund action encompassing Mondelez International Inc (NASDAQ:MDLZ).
What does smart money think about Mondelez International Inc (NASDAQ:MDLZ)?
At Q2’s end, a total of 54 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MDLZ over the last 20 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Trian Partners held the most valuable stake in Mondelez International Inc (NASDAQ:MDLZ), which was worth $810.4 million at the end of the third quarter. On the second spot was Diamond Hill Capital which amassed $388.9 million worth of shares. D E Shaw, Two Sigma Advisors, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Mondelez International Inc (NASDAQ:MDLZ), around 16.8% of its 13F portfolio. Bronson Point Partners is also relatively very bullish on the stock, setting aside 8.9 percent of its 13F equity portfolio to MDLZ.
Since Mondelez International Inc (NASDAQ:MDLZ) has witnessed falling interest from the aggregate hedge fund industry, we can see that there exists a select few fund managers who were dropping their full holdings heading into Q3. Intriguingly, Mark Coe’s Intrinsic Edge Capital said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $15 million in stock, and Sander Gerber’s Hudson Bay Capital Management was right behind this move, as the fund dropped about $5.3 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Mondelez International Inc (NASDAQ:MDLZ) but similarly valued. These stocks are Altria Group Inc (NYSE:MO), Zoom Video Communications, Inc. (NASDAQ:ZM), Becton, Dickinson and Company (NYSE:BDX), Rio Tinto Group (NYSE:RIO), Crown Castle International Corp. (REIT) (NYSE:CCI), Cigna Corporation (NYSE:CI), and Prologis Inc (NYSE:PLD). This group of stocks’ market valuations are similar to MDLZ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MO | 43 | 1289543 | -3 |
| ZM | 48 | 6758811 | 1 |
| BDX | 53 | 1971353 | -3 |
| RIO | 20 | 1324146 | 0 |
| CCI | 43 | 1988345 | 3 |
| CI | 72 | 2871074 | -2 |
| PLD | 35 | 433481 | -5 |
| Average | 44.9 | 2376679 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.9 hedge funds with bullish positions and the average amount invested in these stocks was $2377 million. That figure was $2595 million in MDLZ’s case. Cigna Corporation (NYSE:CI) is the most popular stock in this table. On the other hand Rio Tinto Group (NYSE:RIO) is the least popular one with only 20 bullish hedge fund positions. Mondelez International Inc (NASDAQ:MDLZ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDLZ is 61.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 28.2% in 2020 through August 24th but still beat the market by 20.6 percentage points. Hedge funds were also right about betting on MDLZ, though not to the same extent, as the stock returned 13.4% since the end of June and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
