In this article, we discuss 10 best alcohol stocks to buy heading into 2023. If you want to see more stocks in this selection, check out 5 Best Alcohol Stocks To Buy Heading Into 2023.
Despite the threat of recession, investments in the alcohol sector have shown resilience. CNBC reported in July 2022 that with consumers staying home during the pandemic, a lot of them moved to new, more expensive alcohol brands and increased their consumption of snacks as well. Consumers are also habitual of buying snacks and spirits online still. During the pandemic, the largest boom in the alcohol sector came in the form of pre-mixed and ready-to-drink cocktails and drinks.
Beer is taking up less of the United States alcohol market as new drink categories are introduced in the mix, including ready-to-drink cocktails. Even legacy alcohol firms have broadened their portfolios outside of their primary beer offerings, looking into innovative ways to penetrate into the spirits market. For example, Anheuser-Busch InBev SA/NV (NYSE:BUD) has diversified its portfolio to provide hard seltzers, canned wine, and canned cocktails. Similarly, Molson Coors Beverage Company (NYSE:TAP) rebranded itself and deleted “Brewing Co” from its name in 2019 to indicate a foray into the spirits category.
To make money off of the innovation in the alcohol sector, which is also highly defensive in nature, some of the best alcohol stocks to buy heading into 2023 include Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), and The Boston Beer Company, Inc. (NYSE:SAM).
Our Methodology
We selected the following alcohol stocks based on positive analyst coverage, strong business fundamentals, and future growth potential. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022.
Photo by Adam Wilson on Unsplash
Best Alcohol Stocks To Buy Heading Into 2023
10. Splash Beverage Group, Inc. (NYSE:SBEV)
Number of Hedge Fund Holders: 3
Splash Beverage Group, Inc. (NYSE:SBEV) is a Florida-based company that manufactures, distributes, markets, and sells various beverages in the United States. The company’s products include flavored tequilas, hydration and recovery isotonic sport drinks, wine, and sangria. On October 18, Splash Beverage Group, Inc. (NYSE:SBEV) reported that its performance drink TapouT will now be distributed across New Mexico through Wyoming-based Admiral Beverage Corporation.
According to Insider Monkey’s second quarter database, 3 hedge funds were bullish on Splash Beverage Group, Inc. (NYSE:SBEV), with combined stakes worth $1.35 million, compared to 4 in the prior quarter worth $1.7 million. Hal Mintz’s Sabby Capital is a prominent position holder in the company, with 127,806 shares valued at $382,000.
In addition to Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), and The Boston Beer Company, Inc. (NYSE:SAM), Splash Beverage Group, Inc. (NYSE:SBEV) is one of the best alcohol stocks to invest in.
9. The Duckhorn Portfolio, Inc. (NYSE:NAPA)
Number of Hedge Fund Holders: 13
The Duckhorn Portfolio, Inc. (NYSE:NAPA) is a California-based company that produces and sells wines in North America. It offers wines under multiple brands, including Duckhorn Vineyards, Decoy, Goldeneye, Paraduxx, Migration, Canvasback, Calera, Kosta Browne, Greenwing, and Postmark. The Duckhorn Portfolio, Inc. (NYSE:NAPA) is one of the best alcohol stocks to invest in.
On September 28, The Duckhorn Portfolio, Inc. (NYSE:NAPA) reported its financial results for FQ4 2022, posting a revenue of $78 million, up 10% year-over-year and beating estimates by $0.41 million. Net sales were $372.5 million, an increase of $35.9 million, or 10.7%, versus the prior year.
Wedbush analyst Gerald Pascarelli initiated coverage of The Duckhorn Portfolio, Inc. (NYSE:NAPA) on October 10 with an Outperform rating and an $18 price target. Given its pure-play luxury wine portfolio, The Duckhorn Portfolio, Inc. (NYSE:NAPA) is the best positioned company in all of U.S. wine, the analyst wrote in a research note. He also noted that wine is usually purchased by higher income consumers, who will absorb outsized inflation better. The Duckhorn Portfolio, Inc. (NYSE:NAPA) also looks like a “notable share gainer” as luxury wine continues to outperform all price-tiered categories, the analyst added.
According to Insider Monkey’s second quarter database, 13 hedge funds were bullish on The Duckhorn Portfolio, Inc. (NYSE:NAPA), compared to 15 funds in the prior quarter. The collective stakes in Q2 2022 came in at $230 million, up from 181.3 million in Q1. Select Equity Group held the largest position in the company, comprising nearly 7 million shares worth $146.8 million.
8. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Number of Hedge Fund Holders: 14
Anheuser-Busch InBev SA/NV (NYSE:BUD) was founded in 1366 and is headquartered in Leuven, Belgium. The company engages in the production, distribution, and sale of beer, alcoholic beverages, and soft drinks worldwide. It offers a portfolio of approximately 500 beer brands, including Budweiser, Corona, and Stella Artois. Anheuser-Busch InBev SA/NV (NYSE:BUD) is one of the premier alcohol stocks to buy heading into 2023.
On October 27, Anheuser-Busch InBev SA/NV (NYSE:BUD) stock gained meaningfully on the back of a robust Q3 report and raised full-year forecasts. For the third quarter, Anheuser-Busch InBev SA/NV (NYSE:BUD)’s adjusted EPS of $0.84 was $0.11 ahead of expectations, and a 5.7% year-over-year increase in revenue only slightly fell short of expectations. The beverage company now expects full-year EBITDA to grow between 6%-8% and revenue to grow more than EBITDA “from a healthy combination of volume and price.”
Credit Suisse analyst Sanjeet Aujla on October 28 maintained a Neutral rating on Anheuser-Busch InBev SA/NV (NYSE:BUD) and trimmed the firm’s price target on the shares to EUR 56 from EUR 58.
According to Insider Monkey’s data, 14 hedge funds were long Anheuser-Busch InBev SA/NV (NYSE:BUD) at the end of June 2022, compared to 20 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with more than 9 million shares worth nearly $487 million.
Here is what ClearBridge Investments Large Cap Growth Strategy has to say about Anheuser-Busch InBev SA/NV (NYSE:BUD) in its Q4 2021 investor letter:
“To make room for these new names and optimize the growth profile of the Strategy, we exited two additional positions during the quarter. We sold out of Anheuser-Busch InBev as we see too much work ahead for the world’s largest beer maker to re-ignite sales growth post COVID-19. While the company should benefit from a recovery in the on-premise channel, individual country complexities, the hedging of raw materials, and senior management turnover leave us more confident in the Strategy’s other reopening-related holdings.”
7. The Boston Beer Company, Inc. (NYSE:SAM)
Number of Hedge Fund Holders: 16
The Boston Beer Company, Inc. (NYSE:SAM) is a Massachusetts-based producer and seller of alcohol beverages primarily in the United States. It offers beers, hard ciders, and hard seltzers under the Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard, Dogfish Head, Angel City, Coney Island, and Concrete Beach brands. It is one of the best alcohol stocks to buy now.
On October 20, The Boston Beer Company, Inc. (NYSE:SAM) reported a Q3 non-GAAP EPS of $3.82 and a revenue of $596.45 million, outperforming Wall Street estimates by $0.65 and $30.03 million, respectively. Shipment volume for the third quarter of 2022 was approximately 2.3 million barrels, a 1.4% increase from the prior-year quarter.
UBS analyst Peter Grom on October 24 raised the price target on The Boston Beer Company, Inc. (NYSE:SAM) to $412 from $312 but kept a Neutral rating on the shares. The company reported its first beat in several quarters, but while easier top-line comps and less cost pressure suggest earnings performance should improve from here, visibility remains limited around The Boston Beer Company, Inc. (NYSE:SAM)’s hard seltzer category, its Twisted Tea segment, and the timing and ultimate magnitude of margin recovery, the analyst told investors in a research note.
According to Insider Monkey’s data, 16 hedge funds were bullish on The Boston Beer Company, Inc. (NYSE:SAM) at the end of Q2 2022, compared to 22 funds in the earlier quarter. Jack Woodruff’s Candlestick Capital Management is a prominent position holder in the company, with 120,000 shares worth $36.35 million.
Here is what Artisan Mid-Cap Fund has to say about The Boston Beer Company, Inc. (NYSE:SAM) in its Q3 2021 investor letter:
“We ended our campaigns in Boston Beer Company. Boston Beer Company sells a focused portfolio of alcoholic beverage brands. In recent years, the company has emerged as one of the leaders in the hard seltzer category, which has grown over 150% in each of the past three years (2018-2020). Boston Beer’s Truly brand, the second-largest seller of hard seltzer, has benefited from this growth and was core to our investment thesis. However, the hard seltzer category’s growth has recently slowed to single digits, falling short of high investor expectations and pressuring Boston Beer’s earnings upside. Truly’s growth was core to our investment thesis, and a recovery is uncertain; thus, we ended our investment campaign.”
6. Ambev S.A. (NYSE:ABEV)
Number of Hedge Fund Holders: 18
Ambev S.A. (NYSE:ABEV) is a Brazilian company that produces, distributes, and sells beer, draft beer, carbonated soft drinks and other non-alcoholic beverages, malt, and food products. On October 27, the company reported a Q3 non-GAAP EPS of R$0.20 and a revenue of R$20.59 billion, up 11.4% on a year-over-year basis. Ambev S.A. (NYSE:ABEV)’s total organic volume came in 1.3% higher as compared to the prior-year quarter.
On July 13, JPMorgan analyst Lucas Ferreira upgraded Ambev S.A. (NYSE:ABEV) to Overweight from Neutral with a price target of R$17, up from R$15. The analyst sees commodity prices increasing, indicating a margin turning point in 2023, as “being the missing piece of the puzzle for a tactical upgrade.”
According to Insider Monkey’s data, 18 hedge funds were bullish on Ambev S.A. (NYSE:ABEV) at the end of the second quarter of 2022, with collective stakes worth $185.7 million, compared to 18 funds in the prior quarter worth $210.6 million. Jean-Marie Eveillard’s First Eagle Investment Management is the largest position holder in the company, with more than 279 million shares valued at $700.5 million.
Like Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), and The Boston Beer Company, Inc. (NYSE:SAM), Ambev S.A. (NYSE:ABEV) is one of the premier alcohol stocks to invest in.
Here is what First Eagle Investments Overseas Fund has to say about Ambev S.A. (NYSE:ABEV) in its Q2 2022 investor letter:
“Brazilian brewer Ambev, a subsidiary of Anheuser-Busch InBev, posted better-than-expected earnings for its most recent reporting period driven by improvements in both pricing and volumes. Its stock declined during the quarter, however, weighed down by such Brazil-centric issues as a new wave of Omicron variant infections, high domestic inflation, and a weakened real and national elections in October. We were encouraged that Ambev continued to gain market share despite disruptions associated with Covid and the cancellation of Brazil’s Carnival festivities in April.”
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Disclosure: None. 10 Best Alcohol Stocks To Buy Heading Into 2023 is originally published on Insider Monkey.