Even though the name is still not that familiar to investors, Mondelez International's (MDLZ) business should be. The $50 billion former parent of Kraft Foods Group (KRFT) spun off its grocery unit last fall, breaking the firm's snack food unit into a completely separate publicly traded entity and changing its name. Mondelez owns brands such as Oreo, Cadbury, Trident gum, and Ritz crackers.
The move to split up operations makes a lot of sense, particularly for shareholders of Mondelez. Because MDLZ's brands have historically carried some of the heftier margins in Kraft, the firm stands to offer some stellar profitability improvements -- once the hangover from spinoff and acquisition costs wears off.Mondelez benefits from mature product lines here at home with relatively high consumer stickiness, but more than 80% of the firm's sales come from outside of North America. Much of that remaining exposure comes from emerging market economies, exactly the mix that investors should be targeting from this stock. As economic tailwinds start kicking up again, key exposure to countries like China and India should materially boost MDLZ's top line. Mondelez picked up considerable debt after the grocery business spin-off, but with close to $4 billion in cash on its balance sheet, the firm is still in solid shape for 2013. Analyst sentiment is on the upswing for MDLZ, so we're betting on shares of this Rocket Stock this week.
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