Mondelez International (Mondelez International) Predictability Rank

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What is Mondelez International Predictability Rank?

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Mondelez International Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Mondelez International Predictability Rank Related Terms

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Mondelez International (Mondelez International) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Mondelez International Inc (NAS:MDLZ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

MDLZ:Mexico 1MDLZ:Italy KTFd:UK KTF:Germany KTF:Germany KTF:Germany KTF:Germany MDLZ34:Brazil MDLZ:Austria

Address

905 West Fulton Market, Suite 200, Chicago, IL, USA, 60607

Website

https://www.mondelezinternational.com

Mondelez has operated as an independent organization since its split from the former Kraft Foods North American grocery business in October 2012. The firm is a leading player in the global snack arena with a presence in the biscuit (50% of sales), chocolate (30%), gum/candy (11%), beverage (3%), and cheese and grocery (6%) aisles, as of the end of fiscal 2022. Mondelez's portfolio includes well-known brands like Oreo, Chips Ahoy, Halls, and Cadbury, among others. The firm derives just shy of 40% of revenue from developing markets, about one third from Europe, and the remainder from North America.

Executives

Hart Cees 't	director	C/O MONDELEZ INTERNATIONAL, 905 WEST FULTON MARKET, SUITE 200, CHICAGO IL 60607
Deepak D. Iyer	officer: EVP and President AMEA	C/O MONDELEZ INTERNATIONAL, INC., 905 WEST FULTON MARKET, SUITE 200, CHICAGO IL 60607
Anindita Mukherjee	director	8501 WILLIAMS ROAD, ESTERO FL 33928
Maurizio Brusadelli	officer: EVP and President Asia Pac	MONDELEZ INTERNATIONAL, INC., THREE PARKWAY NORTH, DEERFIELD IL 60015
Daniel E Ramos	officer: Chief Res & Dev Officer	350 FIFTH AVENUE, NEW YORK NY 10118
Ertharin Cousin	director	250 PARKCENTER BLVD PO BOX 20, BOISE ID 83726
Robin S. Hargrove	officer: EVP, Research, Dev & Quality	C/O MONDELEZ INTERNATIONAL, INC., THREE PARKWAY NORTH, DEERFIELD IL 60048
Mariano Lozano	officer: EVP and President, LA	C/O THE DANONE COMPANY, INC., 100 HILLSIDE AVENUE, WHITE PLAINS NY 10603
Fredric G Reynolds	director	PINTEREST, INC., 651 BRANNAN, SAN FRANCISCO CA 94107
Vinzenz P. Gruber	officer: EVP and President, Europe	C/O MONDELEZ INTERNATIONAL, INC., THREE PARKWAY NORTH, DEERFIELD IL 60015
Trian Fund Management, L.p.	director	280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017
Glen Walter	officer: EVP & President, North America	THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Charles E Bunch	director	PPG INDUSTRIES INC., ONE PPG PLACE, PITTSBURGH PA 15272
Michael Andrew Call	officer: VP, Corporate Controller & CAO	905 WEST FULTON MARKET, SUITE 200, CHICAGO IL 60607
Jane Nielsen	director	516 WEST 34TH STREET, NEW YORK NY 10001