In This Article:
Coronavirus is probably the #1 concern in investors’ minds right now. It should be. On February 27th we published this article and predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits.
Is Mondelez International Inc (NASDAQ:MDLZ) a safe investment now? Investors who are in the know are becoming less confident. The number of long hedge fund bets were cut by 6 lately. Our calculations also showed that MDLZ isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings). MDLZ was in 50 hedge funds' portfolios at the end of December. There were 56 hedge funds in our database with MDLZ positions at the end of the previous quarter.
Video: Click the image to 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 more than 41 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 35.3% through March 3rd. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_30574" align="aligncenter" width="399"]
Nelson Peltz of Trian Partners[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. In January, we recommended a long position in one of the most shorted stocks in the market, and that stock returned more than 50% despite the large losses in the market since our recommendation. Keeping this in mind we're going to take a glance at the recent hedge fund action surrounding Mondelez International Inc (NASDAQ:MDLZ).
What have hedge funds been doing with Mondelez International Inc (NASDAQ:MDLZ)?
At Q4's end, a total of 50 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the third quarter of 2019. By comparison, 45 hedge funds held shares or bullish call options in MDLZ a year ago. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).