In this article, we will take a look at the 5 best whiskey and alcohol stocks to buy in 2021. For a detailed analysis of these companies, go directly to the 10 Best Whiskey and Alcohol Stocks to Buy in 2021.
5. The Boston Beer Company, Inc. (NYSE: SAM)
Number of Hedge Fund Holders: 35
The Boston Beer Company, Inc. (NYSE: SAM) is a Massachusetts-based brewery founded in 1984. It is placed fifth on our list of 10 best whiskey and alcohol stocks to buy in 2021. The company owns the Samuel Adams Boston Lager brand, as well as others like Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard, Dogfish Head, and Angel City, among others. Boston Beer has returned more than 130% to investors over the past year. The firm has operations in North America, South America, Australia, Asia, and Central America.
On April 26, investment advisory Citi downgraded The Boston Beer Company, Inc. (NYSE: SAM) to Neutral from Buy while boosting the price target to $1,395. The firm expects 45% growth in revenue for the brewery in this fiscal year, which Citi terms the peak of its top line growth rate given market competition.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in the firm with 373,500 shares worth more than $371 million.
4. Constellation Brands, Inc. (NYSE: STZ)
Number of Hedge Fund Holders: 58
Constellation Brands, Inc. (NYSE: STZ) is a New York-based company that makes and sells beer, wine, and spirits. The firm is one of the largest beer import companies in the US and was founded in 1945. It is ranked fourth on our list of 10 best whiskey and alcohol stocks to buy in 2021. The firm owns the Corona, not to be confused with the virus of the same name, and Modelo brands. The stock has offered investors 45% in returns over the past year. The firm has a market cap of more than $46 billion.
Investment bank Morgan Stanley on April 8 maintained an Overweight rating on Constellation Brands, Inc. (NYSE: STZ) stock despite the beer maker reporting a 6.4% beer depletion growth in fiscal quarter four and posting earnings per share guidance that fell short of market expectations.
At the end of the fourth quarter of 2020, 58 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in the firm, up from 53 in the preceding quarter worth $2.1 billion.
3. Brown-Forman Corporation (NYSE: BF-B)
Number of Hedge Fund Holders: 29
Brown-Forman Corporation (NYSE: BF-B) is a Kentucky-based company that makes and sells alcohol. It is placed third on our list of 10 best whiskey and alcohol stocks to buy in 2021. The firm owns the Jack Daniel’s, Woodford Reserve, Canadian Mist, GlenDronach, and BenRiach brands, and operates globally. Brown-Forman stock has returned more than 16% to investors over the course of the past twelve months despite the pandemic affecting sales of wines, cocktails, vodkas, tequilas, champagnes, and other products.
Investment advisory Cowen on March 4 gave Brown-Forman Corporation (NYSE: BF-B) an Outperform rating with a price target of $100 following a strong quarterly earnings report released by the beverage maker.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in the firm with 10.2 million shares worth more than $814 million.
2. Molson Coors Beverage Company (NYSE: TAP)
Number of Hedge Fund Holders: 39
Molson Coors Beverage Company (NYSE: TAP) is an Illinois-based multinational drink and brewery firm founded in 1873. It is placed second on our list of 10 best whiskey and alcohol stocks to buy in 2021. The firm has operations in the US, Canada, and some European countries. Molson stock has returned more than 45% to investors in the past year. The company has a market cap of more than $12 billion and posted annual revenue of more than $9.5 billion in 2020, slightly below $10.5 billion reported in 2019.
On April 29, Molson Coors Beverage Company (NYSE: TAP) posted quarterly earnings for the first three months of 2021, reporting a revenue of more than $1.9 billion, beating market estimates by close to $30 million.
At the end of the fourth quarter of 2020, 39 hedge funds in the database of Insider Monkey held stakes worth $386 million in the firm, up from 33 in the preceding quarter worth $316 million.
In its Q3 2020 investor letter, Argosy Investors highlighted a few stocks and Molson Coors Beverage Company (NYSE: TAP) was one of them. Here is what the fund said:
“I purchased shares of Molson Coors (TAP) during the third quarter, and this mid-tier brewer is valued attractively at less than 8x EBITDA, at the low end of historical multiples.
I do not expect a lot of growth from this investment, but it is challenging to find fairly-priced resilient businesses in the current environment, and if there is one thing I can count on is that people will drink beer, especially during a pandemic. The biggest risk is obviously that they may choose to drink other types of beer, specifically craft beers. While the company’s balance sheet is a little stretched, I believe the company is focused on reducing debt, most noticeably in their decision to suspend their dividend for 2020. I do not believe this investment will provide explosive returns for us, but I believe it is an attractive alternative to cash. The company can pay down significant amounts of debt fairly quickly and deliver reasonable equity returns by doing so.
Additionally, the company recently got into the hard seltzer game, specifically through their Vizzy and Coors Seltzer products. The author took the opportunity to sample these products over the Labor Day holiday, and came away impressed with the decent flavors, and subsequent conversations with millennials and particularly millennial females who had tried the product reflected positive early feedback for these offerings. Finally, Molson Coors announced a partnership with Coca-Cola to develop their Topo Chico hard seltzer product. The hard seltzer category is growing mid-teens percent annually right now, and I believe Molson Coors has enough irons in the fire here to make a decent impact on their top and bottom lines. Any amount of unexpected growth from these products would be a cherry on top to our investment case.”
1. Diageo plc (NYSE: DEO)
Number of Hedge Fund Holders: 23
Diageo plc (NYSE: DEO) is a London-based alcohol-maker founded in 1997. It is ranked first on our list of 10 best whiskey and alcohol stocks to buy in 2021. The company has operations in more than 180 countries and is one of the largest distilleries in the world with a market cap over $107 billion. Diageo stock has returned more than 31% to investors in the past year. Some of the famous brands owned by the firm include Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray, and Guinness, among others.
Diageo plc (NYSE: DEO) reported earnings for the fourth quarter of 2020 in January this year, posting a revenue of £6.87 billion, down 4.6% compared to the same period last year but beating market predictions by £40 million.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Markel Gayner Asset Management is a leading shareholder in the firm with 1.3 million shares worth more than $214 million.
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
