5 Best Sugar Stocks to Buy Now

In this article, we shall discuss the 5 best sugar stocks to buy now. To read our detailed analysis of the global agribusiness sector and the sugar industry, go directly and see 11 Best Sugar Stocks to Buy Now.

5. Archer-Daniels-Midland Company (NYSE:ADM)

Hedge Fund Holdings: 37

Based in Chicago, Illinois, Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational food processing and commodities trading corporation. The company operates more than 270 plants and 420 crop procurement facilities globally, where cereal grains, sugar, and oilseeds are processed into food, beverage, and animal feed.

On December 13, UBS analyst Manav Gupta initiated coverage of Archer-Daniels-Midland Company (NYSE:ADM) with a Buy rating and a $115 price target. According to the analyst, the company is projected to deliver earnings of $7.75 per share by 2026, factoring in productivity and innovation initiatives, even in a normalized margin environment. Gupta estimates earnings bottoming at $6.07 per share, which the analyst says is substantially above current normalized earnings levels of $4.50 per share.

Here is what Diamond Hill Capital had to say about Archer-Daniels-Midland Company (NYSE:ADM) in their Q1 2022 investor letter:

“ADM (NYSE:ADM) is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM (NYSE:ADM) is positioned well to benefit from the volatility due to its stable North American agricultural base.”

4. The Hershey Company (NYSE:HSY)

Hedge Fund Holdings: 42

Based in Derry Township, Pennsylvania, The Hershey Company (NYSE:HSY) is an American multinational company and is one of the largest chocolate manufacturers in the world. The company also specializes in cookies, cakes, beverages, and other products. As of Q3 2022, The Hershey Company (NYSE:HSY) beat EPS estimates of $2.1 by $0.07, posting earnings of $2.17 per share. The company generated a total revenue of $2.73 billion in Q3 2022, beating consensus $2.62 billion.

On December 12, UBS analyst Cody Ross upgraded The Hershey Company (NYSE:HSY) to Buy from Neutral, raising the price target on the stock to $269 from $244. According to the analyst, packaged food investors should remain selective generally heading into 2023. Keeping this in mind, the analyst ascertains that The Hershey Company (NYSE:HSY) is well-leveraged to remain in a beat and raise cycle through to 2025. Ross attributes the rating upgrade to the company’s wrap-around price benefits in 2023 and additional capacity additions, as well as a highly favorable operating environment in confection.

3. Bunge Ltd. (NYSE:BG)

Hedge Fund Holdings: 48

Headquartered in Chesterfield, Missouri, Bunge Ltd. (NYSE:BG) is an American agribusiness and food company which specializes in the processing and export of soybean, grain, sugar, and fertilizer.

On December 14, UBS analyst Manav Gupta initiated coverage of Bunge Ltd. (NYSE:BG) with a Buy rating, and a $133 price target. According to Gupta, the market is heavily concerned with margin compression in 2024-2025, whilst ignoring the $13.50-plus per share in earnings Bunge (NYSE:BG) is projected to deliver in 2022. Furthermore, the company is hardly getting credit for $3.3 billion in capital it plans to invest internally the next three years. The analyst is confident that will likely add another $2.50 per share to the stock’s EPS, a fact not reflected well in Bunge’s (NYSE:BG) current valuation. This provides for an excellent entry-point for investors.

In Q3 2022,  Bunge Ltd. (NYSE:BG) posted an EPS of $3.45, beating estimates of $2.49 by $0.96. Furthermore, the company generated a total revenue of $16.76 billion, conclusively beating consensus expectations of $16.43 billion. Moreover, Bunge Ltd. (NYSE:BG) managed to maintain hedge fund sentiment around its stock in Q3, with 48 funds long the stock in Q2 and Q3 of 2022.

Here is what Old West Investment Management had to say about Bunge Limited (NYSE:BG) in their Q1 2022 investor letter:

“Bunge (pronounced BUN-GEE) Ltd (NYSE:BG) is one of the biggest agribusinesses and food companies in the world. There are four worldwide companies that dominate the sector, the others being Archer-Daniels-Midland Cargill, and Dreyfuss. One of our favorite ways to screen for new ideas is following insider buying. When I saw the Form 4 filed by new Bunge CEO Greg Heckman, his purchase of $9 million of BG stock intrigued me. My initial thought was the company gave him the stock as a signing bonus. I contacted BG Investor Relations and asked whether it was a signing bonus or did Heckman actually write a check for $9 million. IR assured me it was his own hard-earned money that he invested in the company he was about to run.

Heckman was a long time executive at Conagra Foods who obviously sensed opportunity at BG. One of his first moves as CEO was to move the company’s HQ from New York to St. Louis, right in the middle of America’s breadbasket. BG had been plagued for years with poor decisions by underperforming management. Heckman’s decision to move to St. Louis was indicative of a no-nonsense style and he would commence cutting expenses and selling non-core assets…” (Click here to see the full text)

2. Mondelez International Inc. (NASDAQ:MDLZ)

Hedge Fund Holdings: 52 

Based in Chicago, Illinois, Mondelez International Inc. (NASDAQ:MDLZ) is an American multinational holding company which focuses on the production and distribution of a wide variety of confectionary, food, beverage and snacks. Investor interest around Mondelez International Inc. (NASDAQ:MDLZ) skyrocketed in the third quarter of 2022, with 52 hedge funds having stakes in the company. This was up from 48 funds in the preceding quarter. The company beat EPS estimates of $0.69 by $0.05 in Q3 2022, posting earnings of $0.74 per share.

On December 6, Deutsche Bank analyst Steve Powers raised the price target on Mondelez International Inc. (NASDAQ:MDLZ) to $75 from $72, keeping a Buy rating on the shares. The analyst contends that although the company’s data points are subpar at best, there have been a number of positive developments for the market over the past several weeks, including lower than expected inflation in November, the Federal Reserve signaling a move to a more deliberate pace of hikes, and a move away from the disastrous COVID policy in China. Powers ascertains that although the macroeconomic climate is likely to remain volatile for some time, Mondelez International Inc. (NASDAQ:MDLZ) is well-positioned to resist the headwinds.

Here is what Coho Partners had to say about Mondelez International Inc. (NASDAQ:MDLZ) in their Q3 2022 investor letter:

“Analysts’ bottom-up estimates for both 2022 and 2023 for the S&P 500 Index are beginning to decline. Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Mondelez (NASDAQ:MDLZ), which gets about 75% of its revenues outside the U.S.”

1. PepsiCo Inc. (NYSE:PEP)

Hedge Fund Holdings: 72

PepsiCo Inc. (NYSE:PEP) is an American multinational food, snack and beverage company which is based out of Harrison, New York. The company is one of the biggest beneficiaries of tailwinds in the sugar industry, as it is the primary manufacturer and distributor of high-sugar products like Pepsi, Mountain Dew, Gatorade, and 7UP.

On December 7, Argus analyst John Staszak raised the price target on PepsiCo Inc. (NYSE:PEP) to $206 from $195, maintaining a Buy rating on the shares. According to the analyst, the company’s fundamentals seem solid, it is well-managed, offers a valuable and profitable brand portfolio, and continues to generate solid growth amid a weakening demand for many consumer staples. Staszak adds that he expects that the company’s significant cutting of cost will highly benefit earnings, with PepsiCo Inc. (NYSE:PEP) projected to achieve its goal of $1 billion in annual cost savings in 2022. Hedge fund sentiment around PepsiCo Inc. (NYSE:PEP) increased in Q3 2022, with 72 funds long the stock, up from 65 in the preceding quarter.

Here is what ClearBridge Investments had to say about PepsiCo Inc. (NYSE:PEP) in their Q2 2022 investor letter:

“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo (NYSE:PEP) reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”

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