Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust portfolio, and research director Jack Mohr, discuss why now was the right time to add Mondelez International (MDLZ). Mohr says they had been waiting for the stock to come down and when it finally did, that’s when they bought. Cramer says, ‘it was at $48 and everybody loved it and then it goes down almost 20 percent and people had forgotten it, and that’s the way you invest: you don’t buy the hoopla, you buy the reality, you don’t buy the hope, you buy the facts and at 41 and change, Modelez is right!’ Mohr explains that in the first quarter ‘we saw incredible margin expansion and operating leverage and that was great but…they also need to grow and they need to invest in research and development and marketing in order to really grow their sales because if they can do both, that volume and mix and that operational leverage can be incredible…so in 2Q we learned that they had again incredible profitability but they were investing in some growth too, so I think when you combine those two factors, I think margins can increase by another 400 percent in the next three years.
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