In this piece, we’ll take a look at the five best wine stocks to invest in 2022. For more stocks and industry background, take a look at 10 Best Wine Stocks to Invest In 2022.
5. Compañía Cervecerías Unidas S.A. (NYSE:CCU)
Number of Hedge Fund Holders: 9
Compañía Cervecerías Unidas S.A. (NYSE:CCU) is a Chilean beverage company that sells both beverages and wine. The firm was set up in 1850 and is based in Santiago, Chile. It also has a partnership with Pernod Ricard to sell the company’s products in non-supermarket stores.
Compañía Cervecerías Unidas S.A. (NYSE:CCU) is Chile’s largest beer company, as it controls 60% of the market as of the second quarter of this year. The firm’s shares also appear to be undervalued, as its P/E ratio of 10x is at historic lows while its earnings continue to be at the median level. This implies that while Compañía Cervecerías Unidas S.A. (NYSE:CCU) is delivering on the earnings front, the market valuation of its shares is driven by exogenous factors such as weak sentiment on the Chilean economy.
Insider Monkey studied 895 hedge fund portfolios during the second quarter of this year and discovered that nine had bought Compañía Cervecerías Unidas S.A. (NYSE:CCU)’s shares.
Out of these, Compañía Cervecerías Unidas S.A. (NYSE:CCU)’s largest investor is Jean-Marie Eveillard’s First Eagle Investment Management which owns 14 million shares that are worth $182 million.
4. Vintage Wine Estates, Inc. (NASDAQ:VWE)
Number of Hedge Fund Holders: 10
Vintage Wine Estates, Inc. (NASDAQ:VWE) is an American wine and craft beer company that is headquartered in Village, Nevada. It is one of the youngest wine companies in the industry since it was set up in 2019. The firm has more than fifty brands of wines and beer that it sells in the U.S., Canada, and other countries.
Vintage Wine Estates, Inc. (NASDAQ:VWE)’s diverse set of brands allows it to focus on all kinds of price ranges. Reflecting the recent trend in wine companies of utilizing a digital sales strategy, Vintage Wine Estates, Inc. (NASDAQ:VWE) has also incorporated an omnichannel distribution approach that allows it to deliver directly to customers, wholesalers, and businesses. It also has a strong vineyard presence, as it sources its products from close to 3,000 vineyards across the U.S. – lending Vintage Wine Estates, Inc. (NASDAQ:VWE) supply stability in case some of its vineyards stop production.
10 out of the 895 hedge funds polled by Insider Monkey had held a stake in the company as part of their Q2 2022 holdings.
Vintage Wine Estates, Inc. (NASDAQ:VWE)’s largest investor is David Paradice’s Paradice Investment Management which owns 3.8 million shares that are worth $30 million.
3. The Duckhorn Portfolio, Inc. (NYSE:NAPA)
Number of Hedge Fund Holders: 13
The Duckhorn Portfolio, Inc. (NYSE:NAPA) is an American wine company based out of Saint Helena, California. It sells several different wine brands and conducts sales directly to retailers, customers, and distributors.
The Duckhorn Portfolio, Inc. (NYSE:NAPA)’s sales for the first quarter of this year grew by 11% annually and were driven primarily by the volumes of products shipped. For the remainder of this year, the midpoint of the company’s guided revenue entails that annually, its revenue stands to grow at 10%. The earnings guidance which currently stands between $0.59 and $0.62 implies a high price to earnings multiple of 30.2. This makes The Duckhorn Portfolio, Inc. (NYSE:NAPA) a growth stock, even when compared to some of its larger peers.
However, investment bank JP Morgan believes that The Duckhorn Portfolio, Inc. (NYSE:NAPA) will issue weak revenue guidance for its fiscal year 2023, due to which the bank cut the company’s share price target to $19 from $24 in September 2022. However, JP Morgan’s Andrea Teixeira said that Duckhorn Portfolio Inc (NYSE:NAPA)’s long-term prospects are promising.
13 out of the 895 funds part of Insider Monkey’s survey for their second quarter of 2022 holdings had held a stake in the company.
The Duckhorn Portfolio, Inc. (NYSE:NAPA)’s largest investor is Robert Joseph Caruso’s Select Equity Group which owns 6.9 million shares that are worth $144 million.
2. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 22
Diageo plc (NYSE:DEO) is a British company that was set up in 1886. The firm sells several kinds of alcoholic drinks, including wine, tequila, several kinds of whiskies, and brandy. It is headquartered in London, the United Kingdom.
Diageo plc (NYSE:DEO) was one of the strongest performers during the coronavirus pandemic, with its revenue falling by only 9% in 2020 and managing to grow once again by 8% in 2021. The 8% figure came at a time when the British pound was declining in value, and when these fluctuations are removed, revenue growth actually stood at 16%. Its latest fiscal year saw Diageo plc (NYSE:DEO) grow revenues by another 21% – with the last quarter starting to mark record high inflation in Britain. The firm also aims to return up to GBP4.5 billion to shareholders by the end of June 2023, and it currently pays a 95 cent dividend for a 2.17% yield.
Insider Monkey profiled 895 hedge funds during this year’s June quarter and discovered that 22 had invested in Diageo plc (NYSE:DEO).
Nicolai Tangen’s Ako Capital is Diageo plc (NYSE:DEO)’s largest investor in our database. It owns 1.7 million shares that are worth $296 million.
ClearBridge Investments mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Diageo is a leading global distiller and brewer which addresses the large ($500 billion-plus) and fragmented market for spirits. With its portfolio of premium products, we see Diageo as a steady compounder poised for sustained, above industry growth. The company’s margins remain below pre-COVID levels in a number of geographies and should continue to recover as channels reopen, though we also see opportunities for consistent margin expansion beyond this period of rebound. The spirits category is not immune to weaker consumer spending nor inflation; however the majority of Diageo’s profits are from the U.S. market, which has historically been more resilient. Additionally, the company has a number of margin levers to help combat rising input costs.”
1. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 44
Constellation Brands, Inc. (NYSE:STZ) is an American company that sells beers, wines, and spirits in the U.S., Canada, Mexico, and other countries. It is best known for its Corona beer lineup, and the firm also has fifteen different wine brands. Constellation Brands, Inc. (NYSE:STZ) is headquartered in Victor, New York.
Constellation Brands, Inc. (NYSE:STZ) is the largest high end beer provider in the U.S., and the firm has increased its production capacity fourfold over the past nine years to keep hold of the market. To further increase production, the company’s Obregon Brewery will come online by the end of the current year to add another 39 million hectoliters to its production capacity.
Constellation Brands, Inc. (NYSE:STZ) also pays an 80 cent dividend for a 1.32% yield.
44 of the 895 hedge funds polled by Insider Monkey had invested in Constellation Brands, Inc. (NYSE:STZ) as part of their Q2 2022 investments. BMO Capital set a $280 price target for the company in September 2022, stating that its valuation discount to peers is simply too wide to ignore.
Constellation Brands, Inc. (NYSE:STZ)’s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 1.3 million shares that are worth $326 million.
Disclosure: None. You can also take a look at 10 Best Long-Term Stocks to Buy Now and 10 Best-Performing S&P 500 Stocks in the Last 10 Years.
