In this article, we will take a look at the 10 best whiskey and alcohol stocks to buy in 2021. You can skip our comprehensive analysis of these companies and go directly to the 5 Best Whiskey and Alcohol Stocks to Buy in 2021.
The year 2020 has been transformational for the whiskey and alcohol industry. Due to the lockdown restrictions put in place to contain the COVID-19 pandemic, bars and restaurants, traditionally the go-to places for consumption of alcohol, were shut down. As a result, the home consumption of beverages increased, and in order to survive the hit in sales, many firms turned their attention to online marketing. According to research by the International Wines and Spirits Record, 44% of alcohol consumers on the internet only started buying alcohol online in 2020.
The investments made in ecommerce are likely to remain critical drivers of growth for beverage makers well into 2021. For example, Diageo plc (NYSE: DEO), one of the largest beverage firms in the world, was able to continue with a policy of increasing the annual dividend payment for shareholders because online sales helped the company weather the impact of the coronavirus crisis. In 2020, Diageo plc (NYSE: DEO) reported a 2% increase in sales in the UK, a 30% increase in off-trade drinking, and a massive boost in web-based beverage purchases.
Similarly, Brown-Forman Corporation (NYSE: BF-B), another giant of the beverage industry, redesigned a website previously dedicated to alcoholic products and included home entertainment ideas for the lockdown on the webpage, directing buyers to purchase items from the company to put these ideas into practice. Brown-Forman Corporation (NYSE: BF-B) also reported a 1% increase in net sales in the third fiscal quarter results posted in January, as well as a year-to-date operating income increase of 10% to $998 million.
In addition to the sales boost online, there is also reason to be optimistic about breweries as the vaccine rollout allows for bars to reopen. In April, The Boston Beer Company, Inc. (NYSE: SAM), in earnings results for the first three months of 2021, posted a revenue of more than $545 million, up more than 64% compared to the same period in 2020. Net income over the first quarter also increased a whopping 250% year-on-year to $65 million. The Boston Beer Company, Inc. (NYSE: SAM) has seen share price climb to new highs based on these numbers.
Changing consumer attitudes towards alcohol and the increased sales of ready-to-drink products are likely to shape the future trends for the alcohol industry. Within the ready-to-drink sector, innovation in base drinks, the exploration of local flavors, and the demand for premium alcoholic products are some key areas that investors might want to keep an eye on. Consumer aspirations for no-alcohol or low-alcohol drinks are also increasing, with young people playing the role of disruptors for the brewery market.
This disruptive shockwave is not limited to drinking habits but stretches beyond consumer staples to as far as the finance world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Pixabay/Public Domain
With this context in mind, here is our list of 10 best whiskey and alcohol stocks to buy in 2021.
Best Whiskey and Alcohol Stocks to Buy
10. Ambev S.A. (NYSE: ABEV)
Number of Hedge Fund Holders: 18
Ambev S.A. (NYSE: ABEV) is a Brazil-based brewing company founded in 1999. It is placed tenth on our list of 10 best whiskey and alcohol stocks to buy in 2021. Ambev S.A. (NYSE: ABEV) makes and sells beer, carbonated drinks, and non-alcoholic beverages primarily in South America and North America. Some of the brands it owns include Skol, Brahma, Antarctica, Brahva, Brahva Gold, Extra, Budweiser, Bud Light, Stella Artois, Corona, Modelo Especial, and Beck, among others. Ambev S.A. (NYSE: ABEV) has returned more than 50% to investors over the past year.
On May 6, Ambev S.A. (NYSE: ABEV) posted a revenue of R$16.6 billion, up more than 32% compared to the same period last year. It also reported a net income of R$2.73 billion, beating market forecasts by close to R$0.4 billion.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes worth $306 million in the firm, down from 21 the preceding quarter worth $347 million.
9. Eastside Distilling, Inc. (NASDAQ: EAST)
Number of Hedge Fund Holders: 2
Eastside Distilling, Inc. (NASDAQ: EAST) is an Oregon-based company that sells various types of coffee and alcoholic beverages. It was founded in 2004 and is placed ninth on our list of 10 best whiskey and alcohol stocks to buy in 2021. Some of the brands it owns include Hue-Hue Coffee Rum, Azuñia Tequila, Portland Potato Vodka, and Burnside Whiskey brand. Eastside Distilling, Inc. (NASDAQ: EAST) stock has gained more than 30% since the start of the year as bars and cafes reopen and boost sales after a disappointing 2020.
In late March, Eastside Distilling, Inc. (NASDAQ: EAST) posted earnings for the last three months of 2020, reporting a revenue of $2.32 million, a decrease of close to 17% compared to the revenue from the same period in the previous year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Royce & Associates is a leading shareholder in the firm with 472,225 shares worth more than $604,000.
8. MGP Ingredients, Inc. (NASDAQ: MGPI)
Number of Hedge Fund Holders: 13
MGP Ingredients, Inc. (NASDAQ: MGPI) is a Kansas-based food and beverage company. It is ranked eighth on our list of 10 best whiskey and alcohol stocks to buy in 2021 and was founded in 1941. MGP Ingredients, Inc. (NASDAQ: MGPI) has returned more than 70% to investors over the course of the past twelve months. The company markets bourbon, whiskey, vodka, and gin, among other alcoholic drinks. It also has stakes in the specialty wheat protein and starch food businesses. It has operations in the United States, Japan, Thailand, Mexico, and Canada.
Like Diageo plc (NYSE: DEO), Brown-Forman Corporation (NYSE: BF-B) and The Boston Beer Company, Inc. (NYSE: SAM), MGPI is one of the best whiskey and alcohol stocks to buy now.
On May 5, MGP Ingredients, Inc. (NASDAQ: MGPI) posted a revenue of $108 million for the first three months of 2021, up more than 9% year-on-year and beating market estimates by over $10 million. The earnings per share for the period were $1.01.
At the end of the fourth quarter of 2020, 13 hedge funds in the database of Insider Monkey held stakes worth $27 million in MGP Ingredients, Inc. (NASDAQ: MGPI), up from 11 in the preceding quarter worth $19 million.
7. Willamette Valley Vineyards, Inc. (NASDAQ: WVVI)
Number of Hedge Fund Holders: 1
Willamette Valley Vineyards, Inc. (NASDAQ: WVVI) is an Oregon-based winery founded in 1983. It is placed seventh on our list of 10 best whiskey and alcohol stocks to buy in 2021. Some of the famous brands it owns include Pinot Noir, Chardonnay, Pinot Gris, Pinot Blanc, Rose, Methode Champenoise Brut, and Riesling, among others. Willamette stock has returned more than 160% to investors over the past year. The operations of the firm, primarily related to wines, are spread over 1,018 acres of land.
In November last year, Willamette Valley Vineyards, Inc. (NASDAQ: WVVI) reported a revenue of close to $7 million for the third quarter of 2020, up 2.4% compared to the same period in the previous year. It also posted earnings per share of $0.13 for the period.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in the firm with 126,047 shares worth more than $803,000.
6. Anheuser-Busch InBev SA/NV (NYSE: BUD)
Number of Hedge Fund Holders: 18
Anheuser-Busch InBev SA/NV (NYSE: BUD) is a Missouri-based brewing company. It was founded in 1852 and is ranked sixth on our list of 10 best whiskey and alcohol stocks to buy in 2021. The company stock has offered more than 75% in returns to investors over the past twelve months. The firm owns more than 500 beer brands, including famous ones like Budweiser, Corona, Stella Artois, Beck’s, Hoegaarden, Leffe, Michelob Ultra, and Aguila, among others. It has a market cap of over $147 billion.
On May 10, the Bank of America gave credit to Anheuser-Busch InBev SA/NV (NYSE: BUD) for strong quarterly results in 2021, but warned investors of margin pressure and valuation as the brewing stock took a breather after a ten-week record rally.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Anheuser-Busch InBev SA/NV (NYSE: BUD), the same as in the previous quarter worth $958 million.
In its Q1 2020 investor letter, Broyhill Asset Management, a boutique investment firm based in North Carolina, highlighted a few stocks and Anheuser-Busch InBev SA/NV (NYSE: BUD) was one of them. The comments show that like Diageo plc (NYSE: DEO), Brown-Forman Corporation (NYSE: BF-B) and The Boston Beer Company, Inc. (NYSE: SAM), BUD is one of the best whiskey and alcohol stocks to buy in 2021. Here is what the fund said:
“We also diversified our beer exposure during the quarter, adding a direct investment in Ambev (ABEV) to compliment our existing investment in Anheuser Busch Inbev (BUD). As the current environment has punished highly leveraged businesses like BUD (despite the company’s ability to generate strong and recurring cash flow), the opportunity to own ABEV, with net cash on its balance sheet and the highest returns on capital in the industry—at a lower multiple than its parent—was too good to pass up.
Together, these names represent roughly 20% of our capital today. Given their cheap valuations, combined with the fact that beer and tobacco consumption has historically increased during recession, one could argue that we should have even more exposure to these Sin Stocks. In principle, we agree, and given the opportunity, we’d be happy to increase our positions. But in the interim, we are highly sensitive to maintaining balance in the portfolio. At one end, we own high quality, defensive businesses that should fare well in almost any environment. At the other end, we’ve begun building a portfolio of more cyclical businesses, positioned to rebound sharply and gain share once the clouds clear. We discuss a few of these investments below.”
Click to continue reading and see 5 Best Whiskey and Alcohol Stocks to Buy in 2021.
Suggested articles:
- Top 10 High Growth Stocks To Buy in 2021
- 10 Best Rebound Stocks to Buy Now
- Top 10 Undervalued Tech Stocks
Disclosure: None. 10 Best Whiskey and Alcohol Stocks to Buy in 2021 is originally published on Insider Monkey.
