In this article we discuss the 5 best grocery stocks to buy. If you want to read our detailed analysis of the grocery retail sector, go directly to the 10 Best Grocery Stocks to Buy.
5. Bunge Limited (NYSE: BG)
Number of Hedge Fund Holders: 44
Bunge Limited (NYSE: BG) is an agribusiness and food company operating across the globe. It has five segments: Agribusiness, Edible Oil Products, Milling Products, Fertilizer, and Sugar and Bioenergy segments. It provides its products to various customers, including food manufacturers, grocery chains, wholesalers, distributors, and others. The company ranks 5th on our list of the best grocery stocks to buy.
This May, Bunge Limited (NYSE: BG) announced a dividend of $0.525 per share, bringing a 5% increase from its previous $0.5 dividend. The new dividend has a forward yield of 2.45% and will be payable by September 2nd. In the first quarter of 2021, Bunge Limited (NYSE: BG) had EPS valued at $3.13, beating estimates by $1.59, and its revenue came in at $12.96 billion, representing a 41.3% growth year over year and beating estimates by $2.68 billion. The company has a forward PE ratio of 10.2, and it has a gross profit margin of 8.32%. The stock has gained 24.34% in the past 6 months and 21.73% year to date.
By the end of the first quarter of 2021, 44 hedge fund holders held stakes in Bunge Limited (NYSE: BG), valued at roughly $653 million. This is compared to 51 hedge fund holders in the previous quarter with a total stake value of roughly $936 million.
4. Pinduoduo Inc. (NASDAQ: PDD)
Number of Hedge Fund Holders: 56
Pinduoduo Inc. (NASDAQ: PDD) is a Chinese company operating an e-commerce platform in China. The mobile platform Pinduoduo offers various products, including food and beverages and fresh produce or grocery products. The company ranks 4th on our list of the best grocery stocks to buy.
In the first quarter of 2021, Pinduoduo Inc. (NASDAQ: PDD) had EPS valued at -$0.24, beating estimates by $0.14, and its revenue was valued at $3.47 billion, representing a 278.06% growth year over year and beating estimates by $269.66 million. It has a gross profit margin of 62.47% and has gained 43.92% in the past year. The stock has a consensus Buy rating according to the Wall Street Journal.
By the end of the first quarter of 2021, 56 hedge fund holders held stakes in Pinduoduo Inc. (NASDAQ: PDD), valued at roughly $6.29 billion. This is compared to 54 hedge fund holders in the previous quarter with a total stake value of roughly $10.5 billion.
Tao Value, an investment management firm, mentioned Pinduoduo Inc. (NASDAQ: PDD) in its first-quarter 2021 investor letter. Here’s what they said:
“Pinduoduo reported a strong quarter, reporting MAU of 720 million, now surpassing Taobao. However, it was overshadowed by a bigger news on Colin Huang resigning from Board and completely disassociating himself from PDD’s management & operation. Huang explained in his letter to shareholders that he would start fundamental research initiatives in food science. Although not entirely shocked (as he already stepped down from CEO July 2020), I am surprised by the fast pace of such transition. I remain confident in the organization and the culture Huang built but will monitor it closely.”
3. Walmart Inc. (NYSE: WMT)
Number of Hedge Fund Holders: 58
Walmart Inc. (NYSE: WMT) is an American retailer and wholesaler operating across the globe. The company has three segments, namely Walmart U.S., Walmart International, and Sam’s Club. It owns supercenters, supermarkets, hypermarkets, and other stores alongside operating e-commerce websites to sell its products, including various grocery items like frozen foods, dairy, meat, and other products. The company ranks 3rd on our list of the best grocery stocks to buy.
On June 17th, Walmart Inc. (NYSE: WMT) announced its investment in DroneUp after completing drone deliveries from its stores during the company’s pilot drone delivery program. This brings in more potential for the company’s online sales and deliveries in the future since Walmart Inc. (NYSE: WMT) commented that it would be able to execute drone deliveries in 4,700 stores stocked with over 100,000 popular products, located within 10 miles of about 90% of the American populace.
For the fiscal first quarter of 2021, Walmart Inc. (NYSE: WMT) had EPS valued at $1.18, beating estimates by $0.09. Its revenue came in at $133.67 billion, representing an 8.72% growth year over year and beating estimates by $2.76 billion. The company has a gross profit margin of 25.1% and has gained 13.02% in the past year.
By the end of the first quarter of 2021, 58 hedge fund holders held stakes in Walmart Inc. (NYSE: WMT), valued at roughly $5.88 billion. This is compared to 70 hedge fund holders in the previous quarter with a total stake value of roughly $6.19 billion.
2. Target Corporation (NYSE: TGT)
Number of Hedge Fund Holders: 60
Target Corporation (NYSE: TGT) is a general merchandise retailer in the US offering various products, including grocery items such as dairy, frozen food, and dry grocery. The company sells its products online as well as through its outlets, and as of January 2021, it was operating almost 1,897 stores. It ranks 2nd on our list of the best grocery stocks to buy.
On June 8th, Target Corporation (NYSE: TGT) was upgraded to a Buy by UBS after the latter witnessed structural improvements. The price target was hiked to $265 from $210. 21 other firms have a Buy-equivalent rating or higher on the company as well. In the first quarter of 2021, the company’s EPS was valued at $0.59, beating estimates by $0.19. Its revenue came in at $19.61 billion, representing an 11.28% growth year over year and beating estimates by $576.64 million. Target Corporation (NYSE: TGT) has a gross profit margin of 30.1% and has gained 35.89% in the past 6 months and 33.81% year to date.
By the end of the first quarter of 2021, 60 hedge fund holders held stakes in Target Corporation (NYSE: TGT), valued at roughly $4.76 billion. This is compared to 78 hedge fund holders in the previous quarter with a total stake value of roughly $4.06 billion.
LRT Capital Management, an investment management firm, mentioned Target Corporation (NYSE: TGT) in their first quarter 2021 investor letter. Here’s what they said:
“Target, the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6 ), coupled with the strongest EBITDA margins in over four years. The company has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.
On March 2nd, the company reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”
1. Amazon.com, Inc. (NASDAQ: AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ: AMZN) is a retailer of consumer products operating in the US and internationally. Its products include grocery items, and it also offers delivery services through Amazon Fresh. It ranks 1st on our list of grocery stocks to buy.
On June 22nd, Amazon.com, Inc.’s (NASDAQ: AMZN) acquisition of MGM was reported by the Wall Street Journal to be reviewed by the FTC. The acquisition is worth $8.45 billion and is due to bring more content under Amazon’s wing, including the James Bond franchise. In the first quarter of 2021, the company’s EPS was valued at $15.79 versus estimates of $9.64, and its revenue came in at $108.52 billion, representing a 43.82% growth year over year. Amazon.com, Inc. (NASDAQ: AMZN) has a gross profit margin of 40.48% and has gained 9.87% in the past 6 months and 9.82% year to date as well.
By the end of the first quarter of 2021, 243 hedge fund holders held stakes in Amazon.com, Inc. (NASDAQ: AMZN), valued at roughly $50.4 billion. This is compared to 273 hedge fund holders in the previous quarter with a total stake value of roughly $51.5 billion.
You can also take a peek at Top 10 Consumer Discretionary Stocks to Buy in 2021 and 10 Best Stocks To Buy and Hold For 5 Years.
