10 Best Alcohol Stocks to Buy Now

6. Brown-Forman Corporation (NYSE:BF-B)

Number of Hedge Fund Holders: 30

Brown-Forman Corporation (NYSE:BF-B) is placed at number 6 among the Best Alcohol Stocks to Own According to Hedge Funds. The company engages in the production, distillation, bottling, import, export, marketing, and sale of a wide range of alcoholic beverages. This includes spirits, wines, whiskeys, flavored liqueurs based on whiskey, pre-mixed and pourable products, cocktails, vodkas, tequilas, champagnes, brandy, Bourbons, and liqueurs.

BF-B reported mixed Q4 (ending 30th of April 2024) results as its earnings per share rose 31% YoY to 56 cents and beat the Zacks Consensus Estimate of 42 cents. However, the company’s revenue of $964 million was around 7.8% less than the same quarter last year and missed the consensus estimate of $1.03 billion. This didn’t sit well with investors and Brown-Forman saw its share price fall by around 6% on June 5th. A major factor contributing to the decrease in revenue is a 10% drop in the sales of Jack Daniel’s in 2024, while the overall liquor portfolio was also down by 8%. The company is facing challenges mostly due to a subdued, inflation-driven consumer demand and hence also increasingly cautious retailers and distributors. But this is not something that is unique to BF-B.

However, there was positive news from emerging markets, as net sales there grew 5% on a reported basis and 8% on an organic basis, led by solid growth of New Mix in Mexico and Jack Daniel’s Tennessee Apple in Brazil. Moreover, the travel retail channel also delivered an 8% growth in net sales on a reported basis and 6% on an organic basis. The company is also benefiting from the rising spirits RTD trend, as sales of New Mix improved 32% on a reported basis and 17% on an organic basis, driven by an increase in prices. Brown-Forman’s gross margin has also improved by 150 points on an annualized basis compared to fiscal year 2023, highlighting the strength of its increasingly premiumized portfolio.

Shares of Brown-Forman Corporation (NYSE:BF-B) were held by 30 hedge funds at the end of Q1 2024, with Fundsmith LLP boasting the largest stake of around 11.46 million shares, valued at $591.5 million.