In this article, we discuss the 5 best FMCG stocks to buy now. If you want our detailed analysis of these stocks, go directly to the 10 Best FMCG Stocks To Buy Now.
5. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 58
Colgate-Palmolive Company (NYSE:CL) is an American multinational consumer staples company from New York City, specializing in household, healthcare, and personal care products.
On October 29, the company reported its guidance for FY21, where organic sales were forecasted to rise by 3% to 5%, advertising investment would be increased, and EPS would also continue to grow.
On October 29, the Q3 EPS came in at $0.81, beating estimates by $0.01. Revenue for the quarter totaled $4.41 billion, exceeding estimates by $15.45 million. Berenberg analyst Fulvio Cazzol, on November 2, kept a Hold rating on the stock, lowering the price target from $85 to $77. He cited supply chain disruptions and inflation as key reasons leading to the rating, which are external rather than company specific factors.
As of the second quarter, 58 hedge funds were long Colgate-Palmolive Company (NYSE:CL), with stakes worth $2.36 billion.
Here is what First Eagle Investment Management has to say about Colgate-Palmolive Company (NYSE:CL) in their Q1 2021 investor letter:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 62
The Coca-Cola Company (NYSE:KO) is an American multinational beverage corporation that has been in business since 1892. The company offers 200 brands worldwide, that include Coca Cola, Sprite, Fanta, Costa Coffee, Schweppes, Fresca, and Minute Maid, among others.
The Coca-Cola Company (NYSE:KO) is a popular FMCG stock among the smart money. As of the second quarter of 2021, 62 hedge funds in the database of Insider Monkey’s elite funds reported owning stakes in The Coca-Cola Company (NYSE:KO), with stakes worth approximately $25 billion.
The Coca-Cola Company (NYSE:KO) acquired Bodyarmor SuperDrink, an American sports drink company, on November 1 for $5.6 billion, paid in cash. Consequently, Morgan Stanley analyst Dara Mohsenian stated that if Bodyarmor grows by 40%, The Coca-Cola Company (NYSE:KO)’s organic sales will increase by 85 basis points. The analyst kept an Overweight rating on the stock, setting a $65 price target on The Coca-Cola Company (NYSE:KO).
On October 27, The Coca-Cola Company (NYSE:KO) reported Q3 results. EPS for the period equaled $0.65, exceeding estimates by $0.07. Revenue for Q3 came in at $10.04 billion, beating estimated revenue by $321.89 million.
3. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 66
PepsiCo, Inc. (NASDAQ:PEP), one of the best FMCG stocks, is a multinational food, snack, and beverage corporation. With a rich product portfolio including brands like Pepsi, Mountain Dew, Lay’s, Tropicana, Lipton, and Gatorade, PepsiCo, Inc. (NASDAQ:PEP) is set to partner with Bally’s Corporation (NYSE:BALY), where the beverage giant has exclusive pouring rights in 14 Bally’s properties across 10 states in the US.
In an effort to reduce costs and fleet emissions, PepsiCo, Inc. (NASDAQ:PEP) is purchasing 100 electric trucks from Tesla, Inc. (NASDAQ:TSLA) in Q4. Transportation results in 10% of the company’s gas emissions, and this is a step by PepsiCo, Inc. (NASDAQ:PEP) towards a more sustainable future. The electric trucks will be used to transport beverages between manufacturing centers, warehouses, and retailers.
On October 5, the Q3 EPS for PepsiCo, Inc. (NASDAQ:PEP) came in at $1.79, beating estimates by $0.06. Revenue for the quarter totaled $20.91 billion, exceeding analysts’ revenue expectations by $797.43 million. Following the solid Q3 earnings beat, Lauren Lieberman from Barclays, on October 7, raised the price target on PepsiCo, Inc. (NASDAQ:PEP) stock from $165 to $168, and kept an Overweight rating on the shares.
As of the second quarter, 66 hedge funds in Insider Monkey’s database of exclusive funds were bullish on PepsiCo, Inc. (NASDAQ:PEP), up from 61 in Q1.
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
The Procter & Gamble Company (NYSE:PG) is an Ohio-based multinational consumer goods corporation offering personal care, hygiene, beauty, home care, baby, and family care products. The product portfolio at The Procter & Gamble Company (NYSE:PG) includes brands like Head & Shoulders, Pantene, Pampers, Ariel, Gillette, Febreze, and Old Spice, among others.
On October 20, The Procter & Gamble Company (NYSE:PG) announced a quarterly dividend of $0.87 per share, payable on November 15 to shareholders on record as of October 22.
The Procter & Gamble Company (NYSE:PG) announced on October 19 its Q3 results. The EPS came in at $1.61, beating estimates by $0.02. The quarterly revenue totaled $20.34 billion, exceeding estimated revenue by $445.19 million.
Steve Powers from Deutsche Bank kept a Buy rating on the stock, but lowered the price target from $163 to $160, citing high gross margin pressures.
Of the 873 hedge funds tracked by Insider Monkey, 68 funds reported owning stakes in The Procter & Gamble Company (NYSE:PG) at the end of June this year, worth $6.93 billion.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ) is one of the most popular FMCG stocks in the database of Insider Monkey, with 88 hedge funds being bullish on Johnson & Johnson (NYSE:JNJ) as of June this year. Johnson & Johnson (NYSE:JNJ) is a multinational corporation specializing in consumer packaged goods, medical devices, and pharmaceuticals. It is one of the most valuable global companies, with an impeccable AAA credit rating.
Johnson & Johnson (NYSE:JNJ) CEO Alex Gorsky announced on November 12 that the company’s consumer division that houses brands like Tylenol and Band-Aid, will be separated from the pharmaceutical and medical devices business segments. He stated that this strategic maneuver will allow sustainable long-term growth, since their business and customers have diverged quite a lot. Customers and patients will be served more effectively if these divisions are separated.
On October 19, Johnson & Johnson (NYSE:JNJ) announced a Q3 EPS of $2.60, beating estimates by $0.25. After the Q3 results, Jayson Bedford from the investment advisory Raymond James, on October 20, kept an Outperform rating on the stock, lowering the price target from $183 to $178.
Here is what Distillate Capital has to say about Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
You can also take a look at 10 Growth Stocks to Buy According to Jay Chen’s Himension Capital and Top 10 Stock Picks of Anand Desai’s Darsana Capital Partners.
