Activist investor Bill Ackman acquired a 7.5% stake in Mondelez recently as he likely believes that the snacks company may be an attractive takeover target as the food industry goes through a wave of consolidation but that is not the only reason why this Zacks Rank #1 (Strong Buy) stock looks quite appetizing now.
 
About the Company      
 
Headquartered in Deerfield, IL, Mondelez International (MDLZ – Analyst Report) is one of the world's biggest packaged-food producers, with about $34 billion in annual sales. Its popular brands include Oreo cookies, Ritz crackers and Cadbury chocolates.

Mondelez was previously known as Kraft Foods,and changed its name following the spin-off of its North American grocery business into a separate independent company, Kraft Foods Group.
 
They have over 100,000 employees and offer their products in 165 countries around the world. About 75% of their annual revenue comes from the fast-growing Biscuits, Chocolate and Gum & Candy categories, and almost 40% is generated from higher-growth emerging markets.
 
Excellent Earnings despite Dollar Headwinds
 
Mondelez's Q2 earnings of $0.47 per share beat the Zacks Consensus Estimate of $0.39 by 20.5%. Earnings increased 17.5% from the same quarter last year, thanks to improved organic revenues and margin expansion.
 
Currency headwinds negatively impacted earnings by $0.15 per share and excluding that impact, earnings grew 37.5% on constant-currency basis. Net revenue decreased 9.2% year over year to $7.66 billion due to the dollar strength but it was ahead of the Zacks Consensus Estimate. Adjusted gross margins increased 330 basis points year over year and 220 bps sequentially to 40.2%.
 
Returning Cash to Shareholders
 
Mondelez repurchased about $2.2 billion shares in the first half of the year. The board of directors recently approved a $6 billion increase in the share repurchase program and a 13% increase in quarterly dividend.