10 Best Liquor Stocks To Buy According to Short Sellers

6. SNDL Inc. (NASDAQ:SNDL)

Short % of Shares Outstanding: 1.77%

Next on our list of the Best Alcohol Stocks According to Short Sellers is SNDL Inc. (NASDAQ:SNDL), the largest private-sector liquor and cannabis retailer in Canada. The company also operates as a licensed cannabis producer and stands as one of Canada’s premier vertically integrated cannabis enterprises.

SNDL Inc. (NASDAQ:SNDL)’s liquor business seems to be struggling primarily due to the ‘softness seen across North America’. In Q3 of 2024, SNDL reported a net revenue of $144.6 million from its liquor segment, a decline of $7.2 million or 4.8% YoY. However, the company continues to believe in the long-term potential of the business, which still managed to deliver growth in operating income and gross margin.

Like many of its peers in the cannabis business, SNDL Inc. (NASDAQ:SNDL) has been focused on sales growth instead of profits, increasing its revenue by over 1400% between 2020 and 2023. However, the company still hasn’t managed to become profitable over the last four years. It seems like the strategy is changing now as the Calgary-based company announced a restructuring plan in July to help slash its annual expenses by C$20 million ($13.9 million) and finally improve its profitability. Another positive development is that SNDL’s free cash flow was finally positive ($9.2 million) in Q3 2024, supported by ongoing operational gains in gross margin and efficient working capital management. The company is on track to deliver positive free cash flow for the 2024 calendar year, meeting or even exceeding its guidance.

SNDL Inc. (NASDAQ:SNDL)’s strong financial position provides it a significant competitive edge over its competitors. The company ended Q3 2024 with a cash balance of $263 million, up from $183 million in the previous quarter, with zero outstanding debt. The company also remains committed to returning value to its shareholders and announced a share repurchase program of around $70.3 million in November.

SNDL Inc. (NASDAQ:SNDL) seems to be attracting attention from institutional investors as well. In the third quarter of 2024, shares of the company were held by 10 hedge funds in the Insider Monkey database with a total stake value of $23.34 million, up 42.5% from the previous quarter.