In this article, we are going to look at 11 Best Ice Cream Stocks to Invest In 2024 using Insider Monkey’s hedge funds database.
Regarded as the most favorite dessert globally, ice cream has its popularity game quite high in the U.S. as well, where it leaves an impact of a massive $11.4 billion every year, while, at the same time, giving out $1.9 billion in direct wages, according to IDFA! Also, the U.S. saw 1.3 billion gallons of ice cream getting produced in the country in 2023, showcasing the dessert’s staggering popularity in the country. For all the ice cream lovers, we have also curated a list which you can view to see all the best ice cream brands in the U.S. so that you can fulfill all your ice cream cravings in the best way!
In addition to this, average per capita consumption in the country amounts to over 4 gallons every year, and with a huge population of 341 million, that’s quite a lot of consumption! In terms of consumption, New Zealand, the U.S., and Australia are the 3 countries that top the charts, with per capita annual consumption rates of 28.4 liters, 20.8 liters, and 18.0 liters, respectively!
As such, the global ice cream industry is racing quickly toward the sky, as, after sitting at the $76.1 billion mark in 2023, it’s on its way to hitting $132.3 billion in 2032. That boasts a CAGR of 6.7%, which is quite staggering, according to Fortune Business Insights. Ice cream-making giants like Ben & Jerry’s, Wall’s, Magnum, to name a few, dominate the global ice cream industry with a market share of 20%.
Also check out 15 largest Ice Cream Companies in the World.
Moving on to recent shifting trends of the industry, one interesting trend that has emerged related to flavors, wherein, plant-based and vegan ice creams are growing in popularity. As reported by Straits Research, the global vegan ice cream market size is expected to expand from its market size figure of $623.63 million in 2022 to $984.16 million by 2031, boasting a CAGR of 5.2%. Furthermore, ice creams are planned to be given a new touch by the makers by bringing in the element of spice in ice creams! Crazy, right? In Germany, it is reported by Tetrapak that 34% of ice cream consumers are keen on trying out ice cream flavors with spice in them.
With these innovations emerging, the global ice cream industry is expected to generate over $100 billion in the coming decade, and with the given demand stats we discussed above, it’s quite certain how the ice cream market is one to look at in 2024 and the coming years. Hence, here we are going to discuss 11 Best Ice Cream Stocks to Invest In 2024 so that one can capitalize on the booming times to come in the ice cream industry.
Methodology
To curate our list of 11 Best Ice Cream Stocks to Invest In 2024, we gathered a list of all companies with a significant presence in the ice cream industry. We then further narrowed down on the basis of their upside potential and ranked the finest remaining companies by their number of hedge fund holders as of Q1, 2024, using Insider Monkey’s database that tracks the activity of 920 hedge funds. For stocks with equal number of hedge fund holders, we used their upside as the tiebreaker.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). With this, let’s now jump to our list of 11 Best Ice Cream Stocks to Invest In 2024.
11. Good Times Restaurants Inc. (NASDAQ:GTIM)
Number of Hedge Fund Investors’ holdings: 2
11th on our list of 11 Best Ice Cream Stocks to Invest In 2024 is Good Times Restaurants Inc. Running restaurant businesses, Good Times Restaurants Inc. (NASDAQ:GTIM) owns food franchises like Good Times Burgers & Frozen Custard and Bad Daddy’s Burger Bar.
For the 2nd quarter ending 26 March 2024, the company recorded a total revenue of $35.4 million, marking a 1.9% increase. For the company-owned restaurants, the sales took a rise of $0.6 million to 8.8 million, as compared to the same quarter, a year ago. The operating cost took a rise of 140 basis points, as a result of its acquisition of two restaurants, previously owned by franchisees.
As of Q1, 2024, two hedge funds hold an interest in the stock, with total holdings amounting to $671,000, comprising 271,883 shares. Renaissance Technologies holds the largest interest with a $662,000 value invested in the stock. Furthermore, analysts anticipate an upside potential of 104.1% from the current price of $2.45 to $5.
10. Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF)
Number of Hedge Fund Investors’ holdings: 2
Operating in the U.S., the Republic of Panama, and the Republic of the Philippines, Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) is a confectionery maker, with its headquarters in Colorado, U.S.
The financial performance of Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) took a dip in the latest earnings call for the 3rd quarter ending 30 November 2023, primarily due to the resulting rise in its operating costs pertaining to a restrained production capacity of its production facility.
As of Q1, 2024, two hedge funds that Insider Monkey tracks have their interest in the company’s stock, holding a value of $1.2 million. Renaissance Technologies has the largest interest with 328,360 shares, carrying a value of $1.19 million. has the largest interest with 328,360 shares, carrying a value of $1.19 million. The stock price, which currently sits at $2.7, is expected by analysts to go up to $18.
Following is what Rob Sarlls, the CEO, had to say about the company’s performance in the quarter and his views regarding the future of the company:
“While we experienced strong upfront holiday seasonal demand during our fiscal third quarter, we faced production constraints in our Durango facility, which impacted sales and order fulfillment. To address these challenges, and as part of our ‘simplify and focus’ effort, we initiated a strategic relocation of all consumer packaging mid-quarter to a third-party provider in Utah, which enabled our production to better fulfill the continued strong demand for our packaged product offerings from both our franchisee network and omnichannel partners. Although this transition had a temporary impact on our operating margins, it was an essential step to ensure a positive outcome for our partners and to strengthen our long-term positioning.
As we close fiscal 2024, the actions we have taken over the past year have laid the groundwork for the future of the Company, and we believe we are approaching an inflection point that will enable Rocky Mountain Chocolate to return to growth and profitability in fiscal 2025.”
9. Nestlé (OTC:NSRGY)
Number of Hedge Fund Investors’ holdings: 6
Nestlé (OTC:NSRGY), a Switzerland-based MNC, is a processing conglomerate entity in the foods & drinks industry. It is the biggest food company in the world on the back of its whopping market cap of around $287.12 billion, as of 6th June 2024.
For the latest quarter, ending 31 March 2024, the company saw its sales decrease from $26.3 billion in the quarter, a year ago, to $24.7 billion in the current one. It also saw a negative Real Internal Growth (RIG) of 2%.
However, Nestlé’s diversified product portfolio is one of the biggest factors that can allow it to capitalize on the growth opportunities present in the developing countries, which account for 40% of its turnover. Its product portfolio isn’t only about confectionaries, which has a share of just 8.7% in the company’s 2023 revenue – the portfolio also consists of Powdered and liquid beverages (26.64%), PetCare (18.9%), Nutrition and health science (15.3%), Prepared dishes and cooking aids (11.7%), Milk products and ice cream (11%), and water (3.3%).
A total of 6 hedge funds out of 920 that Insider Monkey tracks, have their interest in the stock, with a total holding value of $788 million. Furthermore, its current price of $105.22 has investors’ eyes, who are expecting it to rise to $117.55 (upside potential of 11.7%), and hence, eight analysts are of the “buy” opinion, while eight others are of the “hold” opinion.
The company’s CEO has the following to say about the rest of the year:
“We had expected a slow start and see a strong rebound in RIG in the second quarter with reliable delivery for the remainder of the year. A wide range of growth initiatives across the Group are now starting to deliver.
In North America, we have stepped up our innovation intensity and commercial activities, primarily in frozen food, which lost ground in the first quarter. The integration plan for Nestlé Health Science’s vitamins, minerals, and supplements business is on track, with the turning point expected in the second quarter and strong growth thereafter.
Nestlé’s top priorities remain to execute with excellence, leverage our science and nutrition expertise, and drive growth with our billionaire brands. We reiterate our 2024 guidance and look ahead with confidence.”
8. Unilever PLC (NYSE:UL)
Number of Hedge Fund Investors’ holdings: 20
With brands like Horlicks, Knorr, Magnum, The Vegetarian Butcher, Wall’s, Ben & Jerry’s, and Hellmann’s under its belt, Unilever PLC (NYSE:UL) is a leading consumer goods manufacturer. It produces and sells a range of products including ice creams, affordable soaps, luxurious shampoos, and everyday household care products.
The company’s solar energy initiatives in its warehouses mean a bright outlook for its ice cream businesses for most of the rest of 2024, while the sun shines bright in regions of Pakistan, Turkey, and Mexico; for instance, this period results in cost-cutting of $205,675 every year in its Izmir warehouse in Turkey alone.
Analysts have their eye on a price target of $56.59 from its current price of $55.59, which is an upside of 2%; also, the price target of the analysts goes as high as $66.13 which might also be the reason why nine analysts are of the “buy” opinion, while six are of the “hold” opinion. From Insider Monkey’s database of hedge fund investors, 20 hold an interest in the company’s stock, with their holdings’ combined value standing at $952.5 million, indicating why one should consider this stock.
With underlying sales growth of somewhere between 3% and 5% already predicted by the company earlier in the year, it recorded Underlying Sales Growth (USG) of 4.4% for the latest quarter, ending 31 March 2024. The ice cream segment, on the other hand, produced underlying sales growth of 2.3%, with a turnover growing from $1.84 billion in the first quarter of 2023 to $1.95 billion in the current quarter!
7. The Wendy’s Company (NASDAQ:WEN)
Number of Hedge Fund Investors’ holdings: 22
The Wendy’s Company (NASDAQ:WEN), known for its hamburgers, is a quick-service restaurant in the U.S., that also makes the much-loved dessert “Frosty”, which is a little bit of ice cream, and a little bit of a shake. It is one of the best ice cream stocks to buy in 2024.
Wendy’s has experienced growing success in recent years, wherein, it observed systemwide sales growth of a whopping 10%, as of the first quarter of 2023; and it’s not stopping, as it saw a further uptick of 2.6% in the first quarter of 2024, hitting systemwide sales figure of $3.5 billion, while also opening up 35 new stores during the quarter, taking its global restaurant count to staggering 7,248.
We find that 30 analysts are also putting their faith in the company’s continuing success, as the average price target that they eye is $29, as compared to its current price of $16.55, which is an upside of a massive 75.2%. Out of 30 analysts, 23 are of the “hold” opinion, again indicating that the stock has good expectations.
As of Q1, 2024, 22 hedge fund investors have their holdings in The Wendy’s Company (NASDAQ:WEN), representing an investment value of $844.3 million, wherein, Trian Partners has the biggest interest of 31.5 million shares carrying a value of $592.8 million.
6. Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Investors’ holdings: 31
Brinker International, Inc. (NYSE:EAT) is a restaurant chain that owns brands like Chili’s® Grill & Bar, Maggiano’s Little Italy and It’s Just Wings.
For the quarter ending 31 March 2024, the company posted an operating margin of 14.2%, which is an 80-basis point uptick on a year-over-year (YoY) basis. On the other hand, the EBITDA for the quarter was recorded at $122 million, with year-to-date EBITDA seeing an increase of 31% to $302 million.
As of Q1, 2024, 31 hedge funds that Insider Monkey tracks have a stake in the company, comprising a value worth $391.8 million. Holocene Advisors has the largest interest in the stock, with an invested value being $134 million. 10 out of 19 analysts are of the “hold” opinion, putting faith in the company’s plans to up its financial position, as stated in the following comments by Brinker International:
“Our significantly improved cash flow generation gives us more flexibility to reinvest in our brands while also reducing leverage to strengthen our balance sheet and manage borrowing costs. For the quarter, we recorded approximately $50 million of capital expenditures, with a focus on capital improvements to existing restaurants, updating IT systems, reimages at both brands, and new restaurant development. We opened two new restaurants during the quarter, both of which are off to great starts, averaging more than $100,000 in weekly sales, nicely above Chili’s brand average. These, along with our new openings earlier in the fiscal year, continue to demonstrate a good guest appetite for Chili’s coming to their specific market.”
5. Shake Shack Inc. (NYSE:SHAK)
Number of Hedge Fund Investors’ holdings: 34
Shake Shack Inc. (NYSE:SHAK), which began its journey as a hot dog cart back in 2001, has evolved into a casual fast-food chain.
Shake Shack Inc. (NYSE:SHAK) share is on the rise on the back of its recently announced quarterly results, for the quarter that ended on 27 March 2024. In the quarter, the company turned things around, as compared to the quarter a year ago, as its net income was flying high with $2.2 million, as compared to a net loss of $1.6 million in the quarter, a year ago. Total revenue, on the other hand, was also going high as it was up 14.7% from $253.28 million a year ago to $290.5 million. Furthermore, anticipations are in place for the company’s revenue to be between $309 to $314 million for the 2nd quarter of 2024.
As of Q1, 2024 34 hedge funds have a combined stake of $695 million in the stock, with 12 West Capital Management holding the largest investment worth $186.5 million. There’s also a bright outlook seen by the analysts who eye a price target of $113.5, which would mean an upside potential of 22.4%, as compared to its current price of $92.7, as of 13th June 2024.
About the outlook of the company for the remainder of the year, Katie Fogertey, the CFO, spoke the following:
“Our teams are executing on our 2024 strategies to drive better overall guest experience, grow sales, expand restaurant-level profit margins, and lower build costs as we look to grow sales year-on-year by 12% to 15% and adjusted EBITDA by [between] 21% [and] 29% to $160m to $170m.”
