In this article, we will discuss the 12 Best FMCG Stocks to Buy According to Billionaires.
Historically, the consumer-packaged-goods (CPG) industry outperformed most of the other industries, mainly due to the high growth and consistent margins, says McKinsey. However, since 2012, numerous factors, such as inflation, market saturation, significant competition, fluctuating consumer tastes and behaviors, along with a fragmented consumer base resulted in growth challenges. Given increased interest rates and elevated industry multiples over the previous few years, there has been lesser deal activity, says the firm. Furthermore, a range of leading CPG companies continue to take a more measured approach, emphasizing midsize deals and aiming to achieve cost and growth synergies.
What Lies Ahead?
The broader downward trend of rates, along with strong, cash-rich balance sheets (and increased capability to take more affordable debt) of CPG companies can result in higher deal activity over the near future for the sector, says McKinsey. The firm expects a mix of 3 types of transactions, i.e., signature, sector-shaping deals, sizable horizontal deals allowing for greater subcategory consolidation, and targeted spin-offs of brands and business units possessing limited synergies or growth enablers with their current owner.
While the consumer sector remains broad, much of the analysis was focused on the F&B sector. McKinsey anticipates to see increased activity throughout CPG sectors, mainly in the personal care and beauty sectors. However, it also expects that the F&B sector might continue to capture a significant share of deals.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Different Levers for Growth
Deloitte believes that, in 2025, the consumer products companies are likely to address the product portfolio and mix in a bid to entice the consumer and invest across the broad set of demand-generation capabilities. Furthermore, the businesses are projected to develop transformative efficiency so that savings can be produced, which can help finance such investments. Deloitte points out that increasing the unit volume sold remains an important lever that can support in driving profitable growth. Notably, some consumer products companies, mainly the profitable growers, remain focused on innovation to re-engage consumers. Deloitte also highlighted that high-performing companies seem to be adopting a clear-eyed view of their portfolios, and they continue to divest and acquire as needed.
Amidst such trends, let us now have a look at the 12 Best FMCG Stocks to Buy According to Billionaires.
A supermarket shelf overflowing with a variety of fast-moving consumer goods.
Our Methodology
To list the 12 Best FMCG Stocks to Buy According to Billionaires, we used a screener and Insider Monkey’s exclusive database of billionaire stock holdings to shortlist the companies catering to the broader FMCG space. For the stocks with the same number of billionaire holdings, we have used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q4 2024. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best FMCG Stocks to Buy According to Billionaires
12. Kenvue Inc. (NYSE:KVUE)
Number of Billionaire Investors: 7
Number of Hedge Fund Holders: 38
Kenvue Inc. (NYSE:KVUE) operates as a consumer health company. Anna Lizzul from Bank of America Securities reiterated a “Buy” rating on the company’s stock with the price target of $25.00. The analyst’s rating is backed by factors including strategic board appointments and potential for multiple expansions. As per the analyst, the recent addition of 3 new board members, which includes 2 independent directors and a representative from Starboard Value, can be regarded as a positive step towards improving governance. This can result in more stability in management and strategic alignment.
Furthermore, the analyst sees medium-term multiple expansions fueled by improvements in volume for the skin health & beauty and self-care segments, together with enhanced brand support as well as a stronger innovation pipeline. Kenvue Inc. (NYSE:KVUE)’s emphasis on capital allocation, such as brand investment, potential acquisitions, and shareholder returns supports a “Buy” rating. Elsewhere, Jefferies has been supporting the company’s strategic initiatives as the firm maintained a “Buy” rating with a price objective of $27.00. Kenvue Inc. (NYSE:KVUE)’s strategic efforts revolve around innovating and adapting its product offerings, which are being regarded as positive catalysts. Also, William Blair has a “Market Perform” rating for Kenvue Inc. (NYSE:KVUE)’s stock as the firm highlighted its investment in innovation and market expansion.
11. Kimberly-Clark Corporation (NYSE:KMB)
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 50
Kimberly-Clark Corporation (NYSE:KMB) is engaged in manufacturing and marketing personal care products. The company’s Q4 2024 and FY 2024 results demonstrated the strength of its innovation-led growth model, fueling volume gains, improving product mix, and garnering strong efficiencies, allowing reinvestment in the brands and new capabilities. The company’s strategic shift, such as portfolio restructuring and operational improvements, continues to place it well for consistent long-term growth. In FY 2024, Kimberly-Clark Corporation (NYSE:KMB) launched its transformative, multi-year Powering Care strategy and successfully rewired the organization into 3 powerhouse segments.
The company’s FY 2024 results surpassed the new long-term growth algorithm, thanks to consistent execution throughout the organization. Kimberly-Clark Corporation (NYSE:KMB) continues to make investments in its product quality, brand support and capability building. It remains bullish on its ability to continue powering investment and bottom-line increase with strong productivity and SG&A savings through wiring for growth. Kimberly-Clark Corporation (NYSE:KMB)’s new organizational design remains focused on fueling innovation, which can be a critical driver of future growth. The accelerated innovation is expected to lead to the introduction of margin-enhancing premium products, supporting the company to offset cost pressures and fuel revenue growth. Furthermore, an agile organizational structure can enable the company to capitalize on emerging market opportunities effectively.
10. Altria Group, Inc. (NYSE:MO)
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 47
Altria Group, Inc. (NYSE:MO) is engaged in manufacturing and selling smokeable and oral tobacco products. The company believes that its actions over time have placed it to win in the US nicotine over the long term. It continues to emphasize the smoke-free product market, focusing on the growth of vapor and modern oral nicotine products. Altria Group, Inc. (NYSE:MO) possesses a demonstrated commitment to responsibility, a strong understanding of the US nicotine consumers as well as a compelling portfolio with products in each of today’s smoke-free categories.
Altria Group, Inc. (NYSE:MO) has reaffirmed its guidance to deliver 2025 full-year adjusted diluted EPS of between $5.22 – $5.37, reflecting a growth of 2% – 5% from a base of $5.12 in 2024. This includes the planned investments in support of its Vision, such as marketplace activities to support its smoke-free products, continued smoke-free product research and development, and regulatory preparation expenses. Altria Group, Inc. (NYSE:MO) plans to grow the U.S. smoke-free volumes by a minimum of 35% from its 2022 base of 800 million units by 2028. Furthermore, it expects to approximately double the U.S. smoke-free net revenues to $5 billion from its 2022 base of $2.6 billion, with $2 billion sourced from the innovative smoke-free products.
