12 Best FMCG Stocks To Buy According to Hedge Funds

1. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 75

Philip Morris International Inc. (NYSE:PM) is a leading global tobacco company. Its product portfolio includes cigarettes and smoke-free products, which include heat-not-burn, vapor, and oral nicotine products. On January 31, Eric Serotta from Morgan Stanley initiated a Buy rating on the stock with a price target of $140. The company has been undergoing a strategic transformation towards smoke-free products to reduce smoking-related health risks.

In the fiscal fourth quarter results for 2024, which were released recently, Philip Morris International Inc. (NYSE:PM) reported revenue of $9.71 billion, exceeding analyst expectations by 2.8%. The company acquired Swedish Match back in November 2022 to enhance its portfolio with the ZYN brand, later FDA authorized all ZYN nicotine pouches currently marketed in the US. During the quarter its smoke-free segment accounted for 40% of total net revenues and around 42% of gross profit. The segment growth was driven by strong performances from IQOS and ZYN nicotine pouches. Looking ahead, Philip Morris International Inc. (NYSE:PM) expects an adjusted EPS between $7.04 and $7.17, indicating potential growth up to about 9% compared to previous estimates. It is the best FMCG stock to buy according to hedge funds.

Broyhill Asset Management stated the following regarding Philip Morris International Inc. (NYSE:PM) in its Q3 2024 investor letter:

“Shares of Philip Morris International Inc. (NYSE:PM) gained 21% in Q3. Philip Morris was by far the largest contributor for the quarter. Our core thesis focuses on the shift in business mix from combustible cigarettes towards reduced risk products as well as the company’s re-entry to the US market with its acquisition of Swedish Match. This year, Zyn has become wildly popular. So much so that the company can barely keep it in stock, even as it expands production. We recently discussed how youth usage of these products, a common critique of the company, remains under 2%, even as its overall popularity drives higher volume.”

While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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