In this article, we will look at the 12 Best FMCG Stocks To Buy According to Hedge Funds.
Consumer Staples Outlook For 2025
Consumer staples refer to essential daily-use products such as packaged food, toothpaste, and dish detergent. These products often run out quickly off the supermarket shelves and are considered “defensive” because consumers continue to purchase these necessities even during economic downturns. Moreover, consumer staple companies are mostly mature dividend payers.
On December 10, 2024, Ben Shuleva, Fidelity Sector Portfolio Manager shared his outlook for the sector in a report published on Fidelity Investments. The consumer staples sector had a positive year but lagged behind the broader market due to investors favoring higher-growth stocks. The high interest rates and concerns about GLP-1 weight-loss drugs affecting food consumption also impacted performance negatively. However, despite these challenges, the sector still posted strong absolute gains. Compared to the S&P 500 index the consumer staple sector gained 16.7% on a year-to-date basis as of December 9, whereas the S&P 500 index gained 26.9% during the same time.
Read Next: 12 Undervalued Cyclical Stocks to Buy Right Now and 10 High Growth Financial Stocks To Invest In.
Ben Shuleva from Fidelity Investments anticipates a return to normalcy for the consumer staples sector in 2025. He suggests this based on a broadly stable economic environment with healthy employment and steady real wage growth. In addition, the Fed is expected to begin cutting interest rates, which could boost dividend-paying stocks. Lastly, consumer spending has remained strong and is expected to remain resilient in 2025, thereby indicating positive sales growth for the sector. Shuleva anticipates that these factors will lead the sector to outperform the broader market in 2025. However, there could be a few uncertainties that could hamper the growth trajectory. The new presidential administration may introduce changes in tariff policies, which could affect certain consumer staples products. Although most consumer staples are manufactured domestically, so the direct impact of tariffs might be limited. Moreover, a strengthening US dollar can negatively affect consumer staples companies with international operations by reducing their foreign earnings when converted back into dollars. Shuleva emphasizes focusing on core fundamentals when investing in consumer staple companies, such as those operating in favorable market structures and maintaining strong underlying growth profiles.
With that, let’s take a look at the 12 best FMCG stocks to buy according to hedge funds.
Image by Squirrel_photos from Pixabay
Our Methodology
To complete the list of the 12 best FMCG stocks to buy according to hedge funds, we used the Consumer Staples Select Sector SPDR Fund and Vanguard Consumer Staples ETF. We selected pure-play Fast-Moving Consumer Goods-producing companies from the holdings of these two ETFs and ranked them in ascending order of the number of hedge funds that held stakes in them at the close of the third quarter. The number of hedge funds was sourced from Insider Monkey’s third-quarter 2024 database.
Why do we care about what hedge funds do? 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 Best FMCG Stocks To Buy According to Hedge Funds
12. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 32
Altria Group, Inc. (NYSE:MO) is a tobacco company based in Virginia. The company produces a range of products related to tobacco and nicotine. It runs famous cigarette brands including Marlboro and Parliament, and has also started producing smoke-free alternatives to align with the dropping smoking rates around the world. During the fiscal fourth quarter of 2024, the company announced that its US smoke-free volumes have increased by 2.6% from its 2022 base volume of 800 units. Management aims to grow the volumes by at least 35% by 2028.
On January 31, Matthew Smith an analyst at Matthew Smith reiterated a Buy rating on the stock, while maintaining the price target of $60. Altria Group, Inc. (NYSE:MO) surpassed analysts’ expectations with its recent fiscal fourth quarter results for 2024. The company delivered revenue of $5.11 billion up 1.63% year-over-year, beating expectations by $59.6 million. Management attributed this growth to a strong performance from its leading brands and also noted margin expansions within its core tobacco business. Altria Group, Inc. (NYSE:MO) is one of the best FMCG stocks to buy according to hedge funds.
Ashva Capital stated the following regarding Altria Group, Inc. (NYSE:MO) in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
11. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 35
Monster Beverage Corporation (NASDAQ:MNST) is a renowned name in the global beverage industry. It is known for its energy drink brands including Monster Energy, Burn, and Relentless. The company also has a significant presence in the alcohol sector since its acquisition of CANarchy Craft Brewery Collective in 2022. One of the strategic edges of the company lies in its partnership with Coca-Cola, this partnership gives the company access to Coca-Cola’s global distribution network.
On January 23, Robert Ottenstein, an analyst at Evercore ISI maintained a Buy rating on the stock and maintained the price target of $60. During the fiscal third quarter of 2024, Monster Beverage Corporation (NASDAQ:MNST) reported energy drinks sector growth in most regions, with challenges across a few. The company noted the energy drinks category is growing at approximately 11.1% year-over-year on an FX-neutral basis in the EMEA and 13.6% growth in the APAC region. Moreover, Latin America remained the strongest contender with 21.1% year-over-year growth. However, on the other hand, the United States experienced slower growth rates compared to previous years.
The company achieved gross margins of 53.7% as a percentage of net sales, excluding Alcohol Brands inventory reserves. Management attributed growth in profit margins to reduced raw material cost and price adjustment strategies. It is one of the best FMCG stocks to buy according to hedge funds.
10. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 36
Constellation Brands, Inc. (NYSE:STZ) is a major alcohol and beverage company that produces and sells beer, wine, and spirits. It is one of the largest beer importers in the United States with popular brands such as Corona Extra, Modelo Especial, and Pacifico. The company produces these beers in Mexico but sells them exclusively in the United States.
On February 3, RBC Capital Markets maintained their Buy rating on the stock and kept the price target of $293 constant. During the fiscal third quarter of 2025, Constellation Brands, Inc. (NYSE:STZ) reported increasing its net sales for the beer segment by 3%. Management attributed this growth to higher shipment volumes. Moreover, its core brands continued to contribute growth with Modelo Especial growing 3% and Pacifico growing 20% year-over-year.
There have been doubts that the company might face trouble with Donald Trump’s announcement of 25% tariffs on imports from Mexico. However, management has made sure to arrange adequate inventory and plans to place cost-cutting measures to absorb tariffs. Constellation Brands, Inc. (NYSE:STZ) is one of the best FMCG stocks to buy according to hedge funds.
Coho Relative Value Equity Strategy stated the following regarding Constellation Brands, Inc. (NYSE:STZ) in its Q2 2024 investor letter:
“We also eliminated Conagra (CAG) in favor of a better risk/return for Constellation Brands, Inc. (NYSE:STZ). We are encouraged by the Constellation Board’s decision to eliminate the dual voting share class and reprioritize capital allocation away from acquisitions and towards returns to shareholders. With capital spending expected to decline and leverage near the company’s target, more cash flow should be available for shareholders. STZ is now focused on the higher growth and the higher margin premium beer category, which they dominate with Corona Extra, Modelo Especial and Pacifico. Additionally, the Wine and Spirits business, which has been disappointing is no longer a meaningful part of STZ’s business as it now accounts for less than 10% of overall earnings. We expect STZ to deliver low double-digit growth in both earnings and dividends for many years to come, which is consistent with the Board’s recent approval of a 13.5% dividend hike.”
9. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Number of Hedge Fund Holders: 38
Keurig Dr Pepper Inc. (NASDAQ:KDP) is a leading non-alcoholic beverage company in North America. It produces and sells both hot and cold drinks, including sodas such as Dr Pepper, and Canada Dry, juices like Mott’s, coffee from Green Mountain Coffee Roasters, and more. The company also makes the Keurig brewing system, which allows people to make single cups of coffee using K-Cup pods.
On January 17, Lauren Lieberman, analyst at Barclays maintained a Buy rating on the stock, while keeping the price target of $36. Oakmark Select Fund in its fourth quarter investor letter for 2024 stated they like the soft drink portfolio and impressive track record of the volume and market share growth. During the fiscal third quarter of 2024, the company increased its net sales by 2.3%, with net income growing 18.9% year-over-year. The US refreshment beverages segment was a notable contender with a growth of 5.3%, driven by volume/mix growth and higher prices. It is one of the best FMCG stocks to buy right now.
Oakmark Select Fund stated the following regarding Keurig Dr Pepper Inc. (NASDAQ:KDP) in its Q4 2024 investor letter:
“Keurig Dr Pepper Inc. (NASDAQ:KDP) is one of North America’s leading beverage companies, with dominant positions in single-serve coffee and flavored soft drinks. The soft drink portfolio has an impressive track record of volume growth and market share gains. We believe this performance can continue due to favorable demographic trends, brand strength, and distribution advantages. Recently, weakness in the Keurig coffee division caused the stock price to come under pressure. However, we believe these industry-wide challenges will prove transitory because coffee remains a popular beverage. Keurig’s coffee division is poised to capitalize on this demand with the largest installed base of single-serve brewers and ample runway to increase household penetration. At the current quote, the market ascribes minimal value to Keurig. We were happy to purchase shares in this above-average business at a discount to the market multiple, other beverage peers and private market transactions.”
8. Kimberly-Clark Corporation (NYSE:KMB)
Number of Hedge Fund Holders: 45
Kimberly-Clark Corporation (NYSE:KMB) is an international company that makes and sells various consumer staple products. Their product portfolio ranges from personal care products like diapers (Huggies), baby wipes, feminine hygiene products (Kotex), and adult incontinence care products (Depend), to professional products like wipes, tissues, towels, soaps, and sanitizers for businesses.
On January 30, Lauren Lieberman of Barclays raised the price target on the stock from $132 to $139 while keeping an Equal Weight rating. The firm believes the strategy of Kimberly-Clark Corporation (NYSE:KMB) shows signs of benefits for the company. Management recently released full-year results for 2024. The year marked a significant year for the company as it launched its multi-year “Powering Care” transformation strategy. This strategy aims to drive innovation-led growth and improve organizational efficiency. During the quarter the company delivered organic sales growth of 2.3%, driven by increased volumes, while reporting a rise of 2.1% in operating profits. It is one of the best FMCG stocks to buy according to hedge funds.
7. Kenvue Inc. (NYSE:KVUE)
Number of Hedge Fund Holders: 46
Kenvue Inc. (NYSE:KVUE) is a global consumer health company that offers a wide range of products aimed at improving everyday health and well-being. Its product portfolio ranges from over-the-counter medicines and products like pain relievers, allergy medications, and more. The company also deals in Skin Health and Beauty and Essential Health products operated under popular brands such as Neutrogena, Aveeno, and OGX. The company sells its products in over 165 countries across various continents.
Kenvue Inc. (NYSE:KVUE) continued to benefit from its strategic Our Vue Forward Program, which is aimed at enhancing the company’s efficiency and competitiveness as it transitions into an independent entity after separating from Johnson & Johnson. Piper Sandler, on January 6, upgraded the stock from Neutral to Overweight and raised the price target from $21 to $26. The firm has confidence in the company’s Our Vue Forward program. During the fiscal third quarter of 2024, the company reported a 0.4% decrease in net sales, influenced by a foreign currency headwind. However, the company achieved an organic growth rate of 0.9% and expanded gross profit margins by 100 basis points to 58.5%, driven by supply chain efficiency and pricing strategies. It is one of the best FMCG stocks to buy according to hedge funds.
6. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 51
Mondelez International, Inc. (NASDAQ:MDLZ) is an international snacks company that makes and sells chocolates, biscuits, and baked snacks. It is the company behind popular brands such as Cadbury Dairy Milk, Milka, and Toblerone. The company also produces other products like gum, candy, cheese & grocery items, and powdered beverages in various regions.
On February 6, Nik Modi, an analyst at RBC Capital, maintained a Buy rating on the stock while keeping the price target at $69. In its fiscal fourth-quarter earnings call for 2024, Mondelez International, Inc. (NASDAQ:MDLZ) indicated its strategy of expanding its distribution channels globally via digital platforms. Management also noted having grown their e-commerce business by double digits. Moreover, on December 14, the company announced its partnership with Amazon Web Services (AWS) to enhance its digital transformation and growth strategy. Under the partnership, Mondelez International, Inc. (NASDAQ:MDLZ) has designated AWS as its strategic cloud provider, aiming to leverage AWS’s industry-leading cloud infrastructure and services for greater security, agility, and reliability across its operations.
During fiscal year 2024, the company delivered balanced top-line growth, strong earnings, and robust free cash flow generation. Its net revenues grew by 1.2%, with organic net revenue growth of 4.3%. Despite input cost inflation, the company achieved mid-single-digit gross profit dollar growth. It is one of the best FMCG stocks to buy according to hedge funds.
5. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 54
Colgate-Palmolive Company (NYSE:CL) is an international producer of consumer staple products ranging from oral care, personal care, and home care, to pet nutrition. During the fiscal fourth quarter of 2024, the company delivered a revenue of $4.9 billion which was slightly lower than what it delivered in the same quarter last year and also missed the market expectation by $44.53 million. This led Stifel to lower the price target on the stock from $95 to $93, while the firm kept its Hold rating. However, Andrea Faria Teixeira from J.P. Morgan kept the Buy rating with the price target of $97.
On the bright side, Colgate-Palmolive Company (NYSE:CL) achieved over $20 billion in net sales for the fiscal year, which is one year ahead of its strategic timeline. The company was able to achieve this milestone due to six consecutive years of organic sales growth. Management has significantly increased advertising spending by almost 15% and is also working on improving innovation capabilities. As a result, the incremental sales from innovations have grown by 45% from 2021 to 2024. Looking ahead, Colgate-Palmolive Company (NYSE:CL), expects net sales to be roughly flat for the current year, mainly due to the foreign exchange impact. However, management expects organic sales growth to be within its long-term targeted range of 3% to 5%. It is one of the best FMCG stocks to buy according to hedge funds.
4. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 58
PepsiCo, Inc. (NASDAQ:PEP) is an international producer and seller of renowned snacks and drinks. It is the company behind popular drinks including Pepsi-Cola, Mountain Dew, Gatorade, and more. The company also produces popular snacks under the brand names Lay’s, Doritos, and Cheetos.
On February 6, Zheng Feng Chee, an analyst from DBS, maintained a Buy rating on the stock with a price target of $172. Feng Chee kept the Buy rating for various reasons, including the company’s focus on strategic product development and category diversification. For instance, PepsiCo, Inc. (NASDAQ:PEP) in January closed its acquisition deal of Siete Foods for $1.2 billion. Siete Foods makes food for people looking for grain-free and dairy-free options. Analyst Fee Chee expects this will further diversify the product portfolio of the company thereby boosting growth by tapping into the underpenetrated away-from-home food segment.
Moreover, Fend Chee also sees substantial growth potential in international markets due to lower per capita consumption of snacks and beverages compared to the US. During fiscal 2024 the company generated $91.8 billion in revenue up slightly from the $91.4 billion generated in 2023. Management during its fiscal fourth-quarter earnings call indicated their plan to build upon the successful expansion of international business while focusing on the North American segment. It is one of the best FMCG stocks to buy according to hedge funds.
3. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
The Procter & Gamble Company (NYSE:PG) is an international producer and seller of consumer staple products. Its product portfolio ranges from beauty products to grooming, healthcare, and baby, feminine, and family care products. It sells its products in around 180 countries through various channels.
On January 23, Robert Moskow, analyst at TD Cowen maintained a Buy rating on the stock with a price target of $189. The rating came after The Procter & Gamble Company (NYSE:PG) released their fiscal second quarter results for 2025. Moskow noted the company achieved better-than-expected organic sales growth of 3%, driven by a 2% increase in volume and a 1% improvement in the mix, demonstrating resilience and effective execution in challenging market conditions. He also likes the company’s focus on premium products, which positively impacted gross profit and category growth despite slight declines in gross and operating margins.
Investors are optimistic about its full-year guidance for 2025, which suggests organic sales growth of 3% to 5% and net sales growth of 2% and 4%. It is one of the best FMCG stocks to buy according to hedge funds.
2. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 69
The Coca-Cola Company (NYSE:KO) is one of the most recognized brands internationally. It operates as a prominent multinational beverage company. Its competitive edge lies in its strong brand recognition which has made its products to become a home staple not only in the United States but throughout the globe. This branding power driven by consistent products has led to strong customer loyalty, allowing the company to implement strategic pricing adjustments without significantly impacting demand. Therefore, despite experiencing a 1% decline in unit sales in the fiscal third quarter of 2024, The Coca-Cola Company (NYSE:KO) effectively countered this with well-executed pricing strategies.
On February 4, Robert Ottenstein of Evercore ISI maintained a Buy rating on the stock with a price target of $72. The company’s Q3 exceeded analyst expectations by $290 million and reported a revenue of $12 billion. Moreover, it also demonstrated robust cash flow performance with $2.9 billion in operating cash flow and $1.6 billion in free cash flow. The Coca-Cola Company (NYSE:KO) also offers a quarterly dividend of $0.485 per share, contributing to an annual dividend of $1.94 per share and yielding approximately 3%, making it an attractive investment opportunity. It is the second-best FMCG stock 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.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
