In this article, we will discuss: 12 Best Chocolate Stocks to Buy According to Hedge Funds.
According to a National Confectioners Association (NCA) survey, 95% of customers use chocolate and candies to celebrate the winter holidays. Sales of holiday confections hit $7 billion in 2023 and are predicted to increase by 3% in 2024. While 72% of Americans prefer chocolate or candies in stockings over gum, 56% of adults prefer giving and getting chocolate over wine. Sixty-four percent feed themselves more sweets, 60% bake holiday treats, and 70% use candy.
As per NCA CEO John Downs:
“Chocolate and candy are essential parts of the winter holidays.”
According to Global Market Insights, in 2024, the global chocolate industry was estimated to be worth $125 billion. From 2025 to 2034, it is expected to grow at a compound annual growth rate of nearly 3.3%. Consumer desire for indulgent products, premium offers, and health-conscious alternatives like dark and organic chocolate drives the global market.
There are a number of noteworthy trends in the chocolate industry, including customers’ growing preference for artisanal and premium chocolates. The U.S. Department of Agriculture (USDA) reports that the world consumed 5.05 billion metric tons of cocoa in 2022-2023, showing a rise in demand for high-end chocolate goods.
A few massive global companies control a large portion of the manufacture and distribution of chocolate and associated candies. The Mars family is the private owner of Mars, the biggest manufacturer of chocolate products and the company behind popular chocolates like Snickers and M&Ms.
Investors have found chocolate stocks to be an appealing investment since they have experienced financial gains. As of February 7, 2025, the broader market’s cocoa industry returned 86.69% in one year, 56.15% over three years, 28.19% over five years, and 13.71% over ten years.
According to the World Bank, concerns about new supply caused cocoa prices to rise again. In December, the price of cocoa increased by 30%, reaching an average of almost $10 per kilogram. Strong seasonal demand combined with worries about the unfavorable weather in West Africa caused this dramatic spike. According to estimates, the world’s cocoa production decreased by 14% during the 2023-24 season, from 4.9 million metric tons in 2022-2023 to 4.2 mmt. The main cause of this fall is the decreased production in Ghana and Côte d’Ivoire, which together account for around 60% of global cocoa production. As per the World Bank, the 2024-25 season is anticipated to see an improvement in supply conditions, especially in Côte d’Ivoire, where favorable weather across important growing regions could increase production by as much as 17 percent. Prices are expected to drop by about 13 percent in 2025 and another 2 percent in 2026 as more supplies hit the market, following an anticipated doubling in 2024. However, there is a considerable upside risk to prices because of the possible recurrence of unfavorable weather in West Africa.
Looking forward, according to JP Morgan’s report, the worldwide scarcity of supply and ongoing underinvestment in cocoa crops are two reasons driving up cocoa prices. Cocoa prices are expected to stay high in the medium term, circling about $6,000/tonne once a balanced market is achieved, despite expectations for a better crop in the 2024-2025 season. This could impact the chocolate industry, as confectionery costs are anticipated to rise by 2025.
Celine Pannuti, Head of European Staples & Beverages, J.P. Morgan, stated:
“Pricing has yet to pick up meaningfully, but we expect this to accelerate potentially to the low-teens in 2025. We see the chocolate market set for inflation largely unprecedented in recent history.”
With that said, here are the 12 Best Chocolate Stocks to Buy According to Hedge Funds.
A close-up of hands deftly moulding a bar of chocolate.
Methodology:
We sifted through holdings of chocolate ETFs and online rankings to form an initial list of 20 chocolate stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 900 hedge funds in Q3 2024 to gauge hedge fund sentiment for stocks. We have used the company’s market capitalization as of February 4 as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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).
12. Rocky Mountain Chocolate Factory Inc. (NASDAQ:RMCF)
Number of Hedge Fund Holders: 2
One of the Best Chocolate Stocks, Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF), is a confectionery and chocolate candy producer. The company operates through retail stores, manufacturing, franchising, U-Swirl operations, and other means. The company’s offerings include a range of clusters, truffles, caramels, creams, toffees, and mints.
In recognition of its operational efficiency and franchise strength, Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) was listed as one of the top 500 franchises in Entrepreneur’s Franchise 500 on January 27, 2025. Jeff Geygan, the interim CEO, attributed the success to the team’s commitment, franchise partners, and devoted clients. Jason Feifer, editor-in-chief of Entrepreneur, underlined the rating as a measure of perseverance and achievement in the franchise industry.
In Q3 of 2025, Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) announced a 3% YoY increase in revenue, hitting $7.9 million, up from $7.7 million the previous year. During the holiday season, e-commerce sales nearly tripled. In Chicago, Charleston, and Brandon, the company is growing by opening two additional locations and a kiosk as franchisees verify upgraded shop layouts and business plans. On January 6, a new ERP system was introduced with the goals of improving cost control, reducing errors, and offering real-time information. There was a notable improvement in holiday fulfillment, with almost all franchisee and specialized market demands being met. The leadership team has been strengthened as well by smart executive hires, such as a new VP of Franchise Business Support and VP of Marketing, who have positioned the business for long-term success.
Jim Simon’s Renaissance Technologies was the largest stakeholder in Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 316,979 shares worth $633,958 as of Q3.
11. Tootsie Roll Industries Inc. (NYSE:TR)
Number of Hedge Fund Holders: 11
One of the Best Chocolate Stocks, Tootsie Roll Industries, Inc. (NYSE:TR) was first introduced in 1896. Since then, it has expanded to become one of the biggest candy firms in the United States.
Leading confectionery manufacturer and retailer produces and distributes well-known brands such as Charms Blow Pop, Andes Mints, Junior Mints, Tootsie Roll, and Tootsie Pop. Tootsie Roll Industries, Inc. (NYSE:TR) distributes its wide variety of chocolates and candies throughout the US, Canada, and Mexico. It manufactures candies, rollers, and chocolate bars under the Charleston Chew brand.
Tootsie Roll Industries, Inc. (NYSE:TR) has iconic brands, a solid balance sheet with no long-term debt, and performs well during economic downturns. However, recently the company has continued reporting weak revenues as consumers are resisting price increases amid high-cost inflation for confectionary products.
In Q3 of 2024, the firm has instead chosen to prioritize maintaining margins. Tootsie Roll Industries, Inc. (NYSE:TR)’s profit margins have been safeguarded by the price hike. Operating cash flow has increased by 37.05% YoY, while the free cash flow grew by 55.04% YoY.
Despite the challenges posed by rising input costs, particularly for cocoa, the business is nonetheless dedicated to growing its capacity and improving operational efficiency to meet shifting consumer needs.
Jim Simon’s Renaissance Technologies was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 551,162 shares worth $17.06 million as of Q3.
10. The Simply Good Foods Company (NASDAQ:SMPL)
Number of Hedge Fund Holders: 26
Market cap as of February 4: $3.79 billion
One of the Best Chocolate Stocks, The Simply Good Foods Company (NASDAQ:SMPL) is a food and beverage company that sells consumer packaged goods. It specializes in low-carb, high-protein bars, shakes, and other products like confections, chips, and cookies under the Atkins and Quest brands. The business distributes its products through a variety of retail channels, mostly in North America, including mass, club, and grocery stores, as well as e-commerce and convenience stores. The majority of its revenue comes from North America.
Quest Nutrition introduced protein-rich chocolate brownies, blueberry muffins, and chocolate chip muffins as part of their new Quest Bake Shop collection last year. Quest is entering the bakery market for the first time with its new product line, which offers healthier options. In this manner, the business aims to attract the market niche that hunts for products that fulfill their protein needs while catering to their sweet tooth.
In Q1 2025, The Simply Good Foods Company (NASDAQ:SMPL)’s OWYN acquisition grew net sales by 10.6%, with excellent growth in both tracked and untracked channels, establishing it as a key growth driver. The company’s strong cash production, operational effectiveness, and strategic location in an expanding industry all point to potential long-term success.
Ave Maria Value Fund stated the following regarding The Simply Good Foods Company (NASDAQ:SMPL) in its Q3 2024 investor letter:
“The Simply Good Foods Company (NASDAQ:SMPL) is a fast-growing, small cap, consumer packaged goods company that utilizes an asset-light business model. The company began in 2016 with the acquisition by Conyers Park Acquisition Corp. of the Atkins branded line of nutritional snack products. Since 2016, Simply Good has made two other significant acquisitions both focused on the nutritional snacking space: 1) Quest – a healthy lifestyle food company offering a variety of protein bars, cookies, chips, ready-to-drink shakes and other snacks. Quest was acquired for $1B in August of 2019. 2) OWYN (Only What You Need) – a producer of plant-based, GMO free, gluten free, clean ingredient protein shakes. OWYN was acquired in April 2024 for $280M.”
TD Cowen increased The Simply Good Foods Company’s (NASDAQ:SMPL) price target from $34 to $36. The firm reiterated its 2025 guidance while acknowledging the reported mixed Q1 performance. Cowen still believes the company is in a good position to benefit from the mainstreaming of high-protein, low-carb, low-sugar foods.
9. Conagra Brands Inc. (NYSE:CAG)
Number of Hedge Fund Holders: 26
Market cap as of February 4: $12.15 billion
Chicago-based Conagra Brands, Inc. (NYSE:CAG) is one of the top branded food corporations in North America and one of the Best Chocolate Stocks. There are options for any occasion from popular brands like Birds Eye, Duncan Hines, Healthy Choice, Marie Callender’s, Reddi-wip, and Slim Jim. The Swiss Miss brand offers a rich, luscious chocolate experience that is created without artificial sweeteners using fresh milk and European cocoa.
For more than a century, the company started out as a flour-milling company in the Midwest and later expanded into other commodity-based industries until establishing itself as a powerfully branded, pure-play consumer packaged products food business. The company has expanded its food businesses through organic brand growth, acquisitions, and innovation that contribute to the delivery of delicious food across both its traditional and up-and-coming brands. The company made over $12 billion in net revenues in fiscal 2024.
In January 2025, Conagra Brands, Inc. (NYSE:CAG) introduced the “On Track” badge on 26 Healthy Choice products, designating them as “GLP-1 friendly” for customers who are making efforts to lose weight and manage their diabetes. The program promotes meals that are high in protein, low in calories, and high in fiber. Simply Steamers and Café Steamers, which retail for $3.49 to $3.99, respectively, have the badge. The USDA-approved labeling is intended to make it simple for consumers who are health-conscious and GLP-1 users to choose appropriate meal selections. This positions it well to capitalize on emerging consumer trends and drive future growth.
Recently, Conagra Brands, Inc. (NYSE:CAG) has been showing signs of a rebound with increasing shipment volumes, organic sales growth, and a growing market share in its portfolio.
John Overdeck And David Siegel’s Two Sigma Advisors was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 6.08 million shares worth $197.62 million as of Q3.
8. The J. M. Smucker Company (NYSE:SJM)
Number of Hedge Fund Holders: 30
Market cap as of February 4: $11.27 billion
One of the Best Chocolate Stocks, The J. M. Smucker Company (NYSE:SJM) is a trustworthy consumer staple business that has steady growth and long-lasting competitive advantages. Since its founding in 1897, the company has expanded to become a $9 billion behemoth, with over 90% of American households buying its products. Its diversified portfolio includes well-known brands like Jif, Uncrustables, Milk-Bone, and Café Bustelo. Richard and Timothy Smucker own 3.2% of the business, showing the strong family ownership of the business and how management’s goals fit with long-term shareholder value.
The firm dominates several markets, including frozen handheld snacks, peanut butter, chocolate spreads, coffee, and more. Notably, Jif and Hostess are brands that manufacture chocolate-related products such as spreads, cakes, and cookies, to name a few.
The J. M. Smucker Company (NYSE:SJM) has agreed to pay $40 million in cash to JTM Foods for the sale of its Cloverhill and Big Texas trademarks as well as some private label goods. The agreement, which supports Smucker’s goal of expanding the Hostess brand, involves 400 workers and a manufacturing site in Chicago. It is projected that the transaction, which is scheduled to finish by April 30, 2025, will not have an impact on earnings and that the money raised will be utilized to pay down debt.
The J. M. Smucker Company (NYSE:SJM) reported the second-quarter performance of 2025, with shipments up 1% and consumption up 0.6%, revealing tightly aligned metrics with no Thanksgiving timing effect. Over the past five quarters, the company has maintained strong trends and achieved industry-leading share performance in the frozen and snacks areas. Consistent top-line growth has been fueled by investments in trade, advertising, and innovation, especially in frozen and snack products. The firm’s solid financial position is further supported by the fact that free cash flow conversion has surpassed 100% as a result of efficient working capital management, particularly in inventory.
John W. Rogers’s Ariel Investments was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 1.63 million shares worth $197.55 million as of Q3.
7. General Mills Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 30
Market cap as of February 4: $33.06 billion
One of the Best Chocolate Stocks, General Mills, Inc. (NYSE:GIS) is a multinational packaged food manufacturer that makes pet food, superpremium ice cream, cereal, snacks, easy meals, dough, and baking materials and mixes. Nature Valley, Betty Crocker, Pillsbury, Old El Paso, Cheerios, Blue Buffalo, and Haagen-Dazs are some of its biggest brands. Despite having operations in Canada, Europe, Australia, Asia, and Latin America, the United States accounted for 81% of its sales in fiscal 2024. Although the majority of its products are marketed to customers in retail stores, the company also serves the food service channel and the commercial baking industry.
Among its brands is Betty Crocker, a popular choice for chocolate enthusiasts due to its extensive selection of baking supplies, which includes chocolate cake mixes, frostings, and simple-to-make chocolate dessert solutions.
General Mills, Inc. (NYSE:GIS) has decades of experience and has consistently surpassed customer expectations, even during the COVID-19 pandemic. As more customers turned to cooking at home due to dining restrictions, business activity increased during this period. Its primary North American retail business did well, due to increased demand for meal solutions, baking supplies, and organic products.
General Mills, Inc. (NYSE:GIS)’s fiscal Q2 2025 results were impressive. Its revenue of $5.24 billion represented a 2% increase over the same time last year. Furthermore, the revenue was $97 million higher than analysts had predicted. Operating profit increased by 33% to $1.1 billion, mostly as a result of higher gross profit and the lack of a goodwill impairment charge from the previous year.
General Mills, Inc. (NYSE:GIS) Board of Directors announced on January 28, 2025, that shareholders of record as of April 10, 2025, would receive a quarterly dividend at the current rate of $0.60 per share on May 1, 2025. The firm and its predecessor company have paid dividends continuously for 126 years.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 1.93 million shares worth $142.77 million as of Q3.
6. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 31
One of the Best Chocolate Stocks, Hormel Foods Corporation (NYSE:HRL) had previously concentrated on meat. It then expanded to provide other protein products and established itself as a branded food firm. The company sells its products through a variety of channels, including overseas (6%), US food service (32%), and US retail (62% of fiscal 2024 sales). Perishable food accounted for 72% of fiscal 2024 sales, while shelf-stable food accounted for 28%.
Hormel Foods Corporation’s (NYSE:HRL) portfolio consists of prominent brands like Justin’s, Hormel Natural Choice, Planters, Skippy, and SPAM. Renowned for its high-quality products, Justin’s maintains its dominance in the natural confectionery market by providing substitutes such as USDA organic, non-GMO chocolate candy pieces, chocolate butter, and spreads. In their respective categories, many of these have the top or second-largest market share.
According to the report for the fourth quarter of 2024, Hormel Foods Corporation (NYSE:HRL)’s net sales were $3.1 billion, operating income was $294 million, and adjusted operating income was $308 million, indicating that the company had a strong operating performance while incurring non-operational expenses that were excluded from the adjusted figure for profitability.
For the 2024 holiday season, one of the company’s brands, PLANTERS, unveiled new Toasted Marshmallow Hot Chocolate Cashews along with returning seasonal favorites and a $1,000 charity and fan contest. Innovative tastes, a giveback program, and strong brand recognition may all improve customer loyalty and engagement, which would boost overall revenue growth.
Israel Englander’s Millennium Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 4.23 million shares worth $133.99 million as of Q3.
5. The Hershey Company (NYSE:HSY)
Number of Hedge Fund Holders: 33
One of the Best Chocolate Stocks, The Hershey Company (NYSE:HSY), a chocolatier established in the United States, is responsible for some of the world’s most popular candies. Aside from the several products carrying its name, the company manufactures Reese’s, Almond Joy, Heath, Milk Duds, York mint patties, and others, as well as a diverse baked product line.
The Hershey Company (NYSE:HSY) is one of the fastest-growing chocolate companies in the world. Since its snacks and sweets brands have stayed popular in North America and entered new markets globally, total sales have increased by about 50% over the last ten years. The expansion this company provides is complemented by its dividend, which has been increasing nearly annually for decades.
Discussions about The Hershey Company (NYSE:HSY) have been common lately, especially because of the pressure on its stock price. Nevertheless, as seen by its return on invested capital, the company’s dominant U.S. market share, robust pricing power, high operational margins, and disciplined capital allocation continue to give it a competitive edge. The company’s position has been further reinforced by its diversification strategy, which includes its entry into the salty snack market. Additionally, the company’s succession planning, led by Michele Buck, provides assurance that the firm’s culture will endure after her eventual retirement.
In the fourth quarter of 2024, consolidated net sales climbed 8.7% year over year to $2,887.5 million. The planned inventory declines within North America Salty Snacks related to the Q4 2023 ERP implementation, favorable net price realization of about 3 points, two extra shipping days, and inventory timing benefits were the main drivers of the 9.0% increase in organic, constant currency net sales.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 503,200 shares worth $96.50 million as of Q3.
4. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 38
Leading the food and beverage industry worldwide, The Kraft Heinz Company (NASDAQ:KHC) sells cheese, sauces, condiments, and drinks. One of its established brands is Baker’s, a reputable name in chocolate baking. Baker’s continues to be an important part of the company’s varied product line, offering exceptional baking products to both professionals and home bakers.
The Kraft Heinz Company (NASDAQ:KHC) was created by the 2015 merger of Kraft and Heinz; however, it hasn’t produced the expected results. It is currently modifying its approach by removing underperforming products and focusing on its core offerings as a result. Despite these difficulties, the company’s solid cash position should reassure income investors. The firm had strong cash creation in its most recent quarter, as evidenced by its year-to-date operating cash flow, which increased 6.7% to $2.8 billion over the prior year. Free cash flow increased by 9.7% year over year to $2 billion.
The Kraft Heinz Company (NASDAQ:KHC) reported mixed Q3 of 2024 results overall, continuing to lag behind analyst projections. Its revenue for the same period last year was 2.85% lower, at $6.38 billion. Nonetheless, the business’s gross profit margin improved, increasing by 20 basis points to 34.2%.
The Kraft Heinz Company (NASDAQ:KHC) is committed to making investments in technology, marketing, and R&D in order to support future revenue growth and offer consumers value-driven solutions. The company’s ability to sustain solid cash flow and streamline operations supports these initiatives. It is also dedicated to bringing its well-known and up-and-coming food and beverage businesses to a worldwide audience.
Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 325.63 million shares worth $11.43 billion as of Q3.
3. Mondelez International Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 51
One of the Best Chocolate Stocks and a massive snack food firm, Mondelez International, Inc. (NASDAQ:MDLZ), is well-known in the chocolate industry for owning brands including Oreo, Cadbury, Chips Ahoy!, Milka, and others. It is the former snacking section of Kraft Foods (now Kraft Heinz), which sold the company to shareholders in 2012. Since then, the business has expanded its chocolate operations, acquiring the luxury chocolate company Hu in 2021 and the well-known Mexican chocolate and candy company Ricolino the following year.
Despite being a slow grower, this snacking expert has been increasing profitability and cutting costs for the last ten years. As the importance of eating healthily becomes more widely recognized, Mondelez International, Inc. (NASDAQ:MDLZ) has also been increasing its market share in the health food industry. Furthermore, it pays a dividend, which has been increasing steadily ever since it became a stand-alone company.
The business operates in a variety of geographic locations, with emerging countries accounting for 39% of its total sales. These regions have grown at a stunning 13% CAGR over the last five years, due to rising earnings and expanding snacking preferences. The strong customer loyalty and the dominance of Mondelez International, Inc. (NASDAQ:MDLZ) in important categories, such as chocolate (13% global market share) and biscuits (17.5% global market share), on the other hand, give developed countries a secure base. The company is positioned for long-term success due to this balance between rapidly growing regions and slowly developed markets.
In 2024, Mondelez International, Inc. (NASDAQ:MDLZ) produced a solid financial performance, increasing organic net revenue by 4.3%, adjusted gross profit dollars by 5.1%, and adjusted EPS by 13%. The business gave $4.7 billion back to shareholders and produced $3.5 billion in free cash flow. During the course of successful campaigns, iconic brands such as Oreo and Cadbury Dairy Milk were able to sustain strong consumer loyalty. Furthermore, the e-commerce industry had double-digit growth, and next-tier markets expanded by about 35%. It has made remarkable strides in sustainability, sourcing 90% of its cocoa through Cocoa Life, cutting carbon emissions by 38% since 2018, and guaranteeing that 96% of its packaging is recyclable. Moreover, the business maintained or increased its market share by 50% of its revenue base, with significant share gains being driven by Cadbury Dairy Milk and Milka.
Peter Rathjens, Bruce Clarke, And John Campbell’s Arrowstreet Capital was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 3.75 million shares worth $276.39 million as of Q3.
2. Kellanova (NYSE:K)
Number of Hedge Fund Holders: 64
One of the Best Chocolate Stocks, Kellanova (NYSE:K), formerly Kellogg’s worldwide snacking division, has been a major global producer and marketer of salty snacks, snack bars, frozen breakfast food, meat substitutes, and other packaged goods since separating from the North American cereal company in October 2023. Its products are offered in more than 180 countries and produced in about 20.
Well-known brands like Pringles, Cheez-It, Rice Krispies Treats, Pop-Tarts, Eggo, Nutri-Grain, and Morningstar Farms are among its assortment of products. Kellanova (NYSE:K) sells chocolate products under the RXBAR brand. About half of Kellanova’s total sales come from sales outside of its home market.
Along with a strong portfolio and a track record of growth, the company boasts world-class supply chain and marketing skills, as well as a fast-expanding reach across channels.
Although unfavorable currency translation had a negative effect on net sales, Kellanova’s (NYSE:K) organic-based growth exceeded its long-term target range for the fourth quarter and the entire year. The company’s profit margins expanded more quickly than anticipated, sustaining double-digit operating profit growth in the fourth quarter and the entire year. The fourth quarter and the entire year 2024 saw a double-digit growth pace in earnings per share, mainly due to increased operating profit.
Kellanova (NYSE:K) will not be offering any forward-looking guidance because of the impending merger with Mars, Incorporated. In the first half of 2025, Mars is expected to pay close to $36 billion to acquire the recently independent company.
Matthew Halbower’s Pentwater Capital Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 5.30 million shares worth $428.11 million as of Q3.
1. Berkshire Hathaway Inc. (NYSE:BRK.A)
Number of Hedge Fund Holders: 120
A holding firm, Berkshire Hathaway Inc. (NYSE:BRK.A) has numerous subsidiaries involved in various business ventures. The company’s primary business is insurance, which is mostly handled by Geico, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. To acquire Burlington Northern Santa Fe (railroad), Berkshire Hathaway Energy (utilities and energy distributors), and the businesses that comprise its manufacturing, service, and retailing operations (including five of Berkshire’s largest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR), the firm has utilized the excess cash thrown off from these and other operations over the years. The conglomerate is distinct in that it operates entirely decentralized.
Along with significant ownership positions in businesses like Apple and Coca-Cola, its subsidiaries include well-known brands including GEICO, BNSF Railway, See’s Candy, and Dairy Queen.
Not every company thrives through expansion. Businesses can benefit their shareholders in various ways. The Best Chocolate Stock, Berkshire Hathaway Inc. (NYSE:BRK.A)’s See’s Candies, which includes chocolates, is a good example. Its customer base has only grown glacially, but it has been a very profitable investment.
See’s Candies has increased its profits more aggressively since 2007 by boosting prices by an average of 5.5% annually, even though inflation has been averaging 2.5%. The company’s core narrative has remained consistent for over fifty years. See’s makes additional revenue from its current clientele each year while losing a ton of extra cash.
A key factor in Berkshire Hathaway Inc. (NYSE:BRK.A)’s success has been Buffett’s unmatched ability to spot cheap assets and encourage their expansion. The company beat the broader market in 2024, which is indicative of Buffett’s approach to buy and hold companies and stocks that increase in value over time. Berkshire’s fully owned companies produce substantial cash flows in addition to its equity holdings, establishing a self-sustaining cycle of expansion and reinvestment. The insurance segment, a critical driver, not only provides steady revenue but also delivers “float”—capital that can be invested to compound returns further. The value of diversity is shown by the various companies, which range from energy utilities to confectioneries, and provide a significant contribution to the conglomerate’s revenue stream.
Donald Yacktman’s Yacktman Asset Management was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 471,805 shares worth $213.86 million as of Q3.
Overall, BRK.A ranks first on our list of the 12 Best Chocolate Stocks to Buy According to Hedge Funds. While we acknowledge the potential for BRK.A to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BRK.A but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. 12 Best Chocolate Stocks to Buy According to Hedge Funds is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
