In this article, we will take a look at the 7 Best Vegan Stocks to Buy According to Hedge Funds.
Vegan food consists of products that are entirely free of animal ingredients or by-products, including meat, poultry, fish, dairy, eggs, honey, and other animal-derived substances. Veganism is both a dietary and lifestyle choice aimed at avoiding animal exploitation while promoting ethical, environmental, and health benefits. That said, vegan and plant-based products appeal to a much broader audience than just those avoiding meat and animal products. This is especially true for meat substitutes. Pat Brown, founder of Impossible Foods, believes that vegetarians are not the primary audience for these products, which are designed to closely mimic the taste and texture of meat. Instead, meat substitutes are aimed at meat eaters, helping them transition to a plant-based diet more easily by offering familiar flavors and experiences.
Additionally, a study published by the Journal of the American Medical Association (JAMA) found that individuals who follow a vegan diet have a higher life expectancy than those on a meat-based diet. This has led health-conscious consumers to embrace vegan food, positively impacting leading plant-based food stocks. Another study by researchers at Oxford’s Martin School found that a global shift toward diets rich in fruits and vegetables and less reliant on meat could potentially prevent around 8 million deaths by 2050. This dietary transition could also save approximately $1.5 trillion in climate-related costs and reduce greenhouse gas emissions by over 60%. Studies consistently show that Gen Z is particularly interested in plant-based diets, driving companies to develop products tailored to this key demographic. Plant-based diets also offer substantial environmental benefits.
Veganism extends beyond just food—clothing made without animal products also qualifies as vegan fashion. More specifically, vegan fashion often refers to items typically made from plant-based or synthetic alternatives to animal materials. In 2022, the global market for non-animal leather clothing and accessories reached approximately $41 billion, with the United States as the largest market. Footwear is a key segment in this shift, where leather has long been valued for quality in both sneakers and formal shoes. To meet growing demand for animal-free options, brands are innovating. In 2021, Adidas introduced a Stan Smith sneaker made from a mushroom-based leather alternative, and has also collaborated with vegan fashion leader Stella McCartney on other vegan footwear.
Despite rising awareness of animal welfare in fashion, this hadn’t consistently translated into consumer behavior until more recently. A new global YouGov survey reveals that over a quarter (27%) of people now actively avoid animal-based fashion. The poll also shows strong public support for cruelty-free fashion, with 70% of Americans agreeing that fashion companies should reduce their use of animal-derived materials, invest in alternatives, and transition to sustainable, animal-friendly materials.
According to Fortune Business Insights, the global vegan food market was valued at $33.14 billion in 2023 and is expected to grow to $37.37 billion in 2024. By 2032, it is projected to reach $103.00 billion, with a compound annual growth rate (CAGR) of 13.51% over the forecast period. Bloomberg Intelligence further projects that the plant-based food market could account for 7.7% of the global protein market by 2030, with an estimated value exceeding $162 billion. Moreover, meat alternatives are set to capture a significant portion of the plant-based food market through 2030. If this sector mirrors the growth of plant-based milk, Bloomberg Intelligence projects that it could expand from its current $4.2 billion to $74 billion over the next decade.
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Our Methodology
We first compiled a list of vegan stocks by sifting through financial media reports. We selected the following vegan stocks based on hedge fund sentiment toward each company. The sentiment data was sourced from Insider Monkey’s database, which tracks 912 elite hedge funds as of the end of Q2 2024. The list is organized in ascending order, based on the number of hedge fund investors in each firm.
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7. Mission Produce, Inc. (NASDAQ:AVO)
Number of Hedge Fund Holders: 9
Mission Produce, Inc. (NASDAQ:AVO) engages in sourcing, growing, packing, marketing, and distributing avocados, mangoes, and blueberries to grocery retailers, distributors, and foodservice companies across the United States and internationally. While the company faced challenges from falling avocado prices and COVID-19-related production constraints, it was among the first in the industry to rebound, with operations now nearing pre-pandemic levels. The company’s business structure comprises three segments: Marketing and Distribution, International Farming, and Blueberries.
In Q3 2024, Mission Produce, Inc. (NASDAQ:AVO) reported strong financial performance, achieving a 24% year-over-year revenue increase to $324 million and a 49% rise in adjusted EBITDA to $31.5 million. Despite the impact of El Niño on Peruvian farming operations, the company sustained high pricing and met demand by leveraging its global sourcing capabilities. The Marketing and Distribution segment benefited from a substantial rise in avocado sales prices, while the International Farming segment maintained stable adjusted EBITDA, despite a decline in sales volume from owned farms.
For Q4, the company projects revenue to surpass $320 million, a significant increase from $257.9 million in the same period last year. This growth is expected to be driven largely by the Marketing and Distribution segment, which continues to benefit from a favorable pricing environment. Moreover, the company’s adjusted EBITDA is anticipated to exceed $28 million, up from $17.3 million in Q4 2023.
6. Ingredion Incorporated (NYSE:INGR)
Number of Hedge Fund Holders: 25
Ingredion Incorporated (NYSE:INGR), a key player in the packaged foods industry, produces a variety of ingredients, including sweeteners, starches, and biomaterial solutions. The company is a leading supplier of plant-based food ingredients, such as plant proteins and starches.
Ingredion Incorporated (NYSE:INGR) posted third-quarter earnings that exceeded analyst expectations, driven by strong performance across all segments. Adjusted earnings per share for the quarter reached $3.05, surpassing the consensus estimate of $2.60. However, revenue came in slightly below expectations at $1.87 billion, down 8% year-over-year. The company also reported a 26% year-over-year increase in operating income to $268 million, with adjusted operating income rising 29% to $282 million. Additionally, Ingredion Incorporated (NYSE:INGR) raised its full-year 2024 adjusted EPS guidance to between $10.35 and $10.65, higher than its previous forecast.
On October 21, Oppenheimer reaffirmed its Outperform rating on Ingredion Incorporated (NYSE:INGR) and raised its price target from $138 to $147. This decision reflects an upward revision of second-half 2024 earnings estimates, with a new full-year EPS forecast of $10.05.
5. Tyson Foods, Inc. (NYSE:TSN)
Number of Hedge Fund Holders: 27
Tyson Foods, Inc. (NYSE:TSN) is a global food company that has expanded into the alternative meat market in recent years. Its offerings include plant-based nuggets made primarily from pea protein, plant-based patties, and blended products that combine plant-based ingredients with traditional meat, aiming to reduce overall meat content.
The company exceeded analyst expectations by reporting adjusted earnings per share of $0.87 in Q3 2024. This strong performance prompted management to narrow its full-year 2024 guidance toward the higher end. Analysts project Tyson’s EPS at $1.95 for the first fiscal year, with estimates rising to $3.78 for the second fiscal year, reflecting growing confidence in the company’s ability to navigate industry challenges.
Citi has revised its outlook on Tyson Foods, Inc. (NYSE:TSN) on October 9, lowering the price target from $63 to $60 but maintaining a Neutral rating on the stock. This update comes ahead of Tyson’s anticipated fiscal fourth-quarter earnings report, set for release on November 11. Citi’s analysis suggests that Tyson Foods, Inc. (NYSE:TSN) could exceed the Visible Alpha consensus by $0.10 in EPS for Q4 of fiscal 2024. However, for fiscal year 2025, Citi forecasts an EPS $0.21 below the consensus due to expected declines in operating profit and other below-the-line items. Despite the revised price target and lower EPS outlook, Citi does not expect a negative surprise in Tyson’s initial operating profit guidance for the upcoming year.
4. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 31
Hormel Foods Corporation (NYSE:HRL) is a global branded food company operating in over 80 countries, with a portfolio featuring iconic brands like Planters, Skippy, SPAM, Hormel Natural Choice, and Justin’s. Among its offerings, the Happy Little Plants brand caters to consumers seeking plant-based protein alternatives, targeting vegan and vegetarian markets.
In Q3 2024, Hormel Foods Corporation (NYSE:HRL) reported net sales of $2.90 billion, a 2.2% year-over-year decline, largely due to weaker performance in its Retail and International segments. The Retail segment, including Justin’s, experienced a 7% drop in sales, primarily driven by lower volumes and pricing for whole bird turkeys and disruptions at its Suffolk, Virginia facility. Despite these challenges, Hormel Foods Corporation (NYSE:HRL) generated $218 million in operating cash flow, reflecting strong liquidity, and reduced capital expenditures compared to the previous year, showcasing effective cost management. The company also returned $155 million to shareholders through dividends, continuing its 96-year streak of uninterrupted payouts.
Stephens initiated coverage on the food company on October 3, giving it an Equal Weight rating with a $31 price target. The firm acknowledged Hormel’s leadership in its core product categories and its focus on expanding branded, value-added products. However, it also highlighted operational challenges, particularly in the Turkey segment, as key obstacles for the company.
3. Conagra Brands, Inc. (NYSE:CAG)
Number of Hedge Fund Holders: 31
Conagra Brands, Inc. (NYSE:CAG), based in Chicago, is one of North America’s leading branded food companies, with a portfolio that includes plant-based brands like Gardein and Earth Balance.
Conagra Brands, Inc. (NYSE:CAG) reported a first-quarter sales decline of 3.8% to $2.79 billion, falling short of the 2.1% decrease expected by analysts, amid a consumer shift toward more budget-friendly options. Despite this, the company reaffirmed its fiscal year 2025 earnings guidance, remaining on track with its annual goals. Moreover, Conagra Brands, Inc. (NYSE:CAG) has continued to strengthen its portfolio, having acquired Sweetwood Smoke & Co. and adding FATTY Smoked Meat Sticks to its offerings.
On October 3, Goldman Sachs maintained its Conviction Buy rating on Conagra Brands, Inc. (NYSE:CAG) with a $36 price target, expressing optimism despite an 8% drop in its share price following the earnings report. Goldman Sachs attributed some of the underperformance to a temporary production issue with ConAgra’s Hebrew National brand, which has since been resolved.
2. E.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 40
Oakland, California-based e.l.f. Beauty, Inc. (NYSE:ELF) offers high-quality, cruelty-free, and vegan makeup through its portfolio of five brands: e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, and Keys Soulcare. The company uses only animal-free ingredients in all its products.
On October 21, Piper Sandler reiterated its positive outlook on e.l.f. Beauty, Inc. (NYSE:ELF), keeping an Overweight rating and a $162 price target. The firm’s analysis pointed to strong growth potential for the cosmetics company, especially through digital and international expansion. While scanner data shows a slowdown, with sales up 8.5% year-over-year for the four weeks ending October 6—down from 26.3% in the first fiscal quarter—Piper Sandler remains confident, with the firm believing that e.l.f. Beauty, Inc. (NYSE:ELF) is well-positioned to meet or even exceed the upper end of management’s fiscal year targets.
In Q1 2025, the company outperformed expectations, reporting earnings per share of $0.87, above the forecasted $0.67, and revenue of $324.48 million, surpassing analysts’ predictions. This success was driven by strong demand and the launch of popular products like the Power Grip line. For fiscal 2024, the company reported over $1 billion in net sales, a 77% year-over-year increase, with international sales up 115%. Additionally, e.l.f. Beauty, Inc. (NYSE:ELF) achieved a 30% growth in its color cosmetics segment.
Shelton Sustainable Equity Fund stated the following regarding E.l.f. Beauty, Inc. (NYSE:ELF) in its Q2 2024 investor letter:
“E.l.f. Beauty, Inc. (NYSE:ELF) operates as a cosmetic company. The company offers beauty products such as eyeliners, lipsticks, creams, brushes, powder, and skin care products for eyes, lips, face, and paw. e.l.f. Beauty is the first beauty company that is Fair Trade Certified, the first mass brand to be 100% vegan and cruelty free, and fits our PRIME criteria, primarily the impact and principles portion of our thesis, as e.l.f.‘s low cost and high quality provides access to makeup and skincare for every customer.”
1. Ulta Beauty Inc. (NASDAQ:ULTA)
Number of Hedge Fund Holders: 46
Ulta Beauty, Inc. (NASDAQ:ULTA) is a leading American chain of beauty and cosmetics stores, offering over 600 brands. Among its featured vegan brands are IGK, IT Brushes, Nailtopia, and Tanology. In 2020, Ulta launched its ‘Conscious Beauty’ program across all stores, online, and via its app. This initiative highlights vegan, cruelty-free, and sustainably packaged products, appealing to eco-conscious consumers.
Despite some challenges in its Q2 FY2024 earnings, Ulta Beauty, Inc. (NASDAQ:ULTA) remains a strong investment choice due to its strategic strengths. The company saw a modest 0.9% increase in net sales, reaching $2.55 billion, demonstrating resilience despite a 1.2% decline in comparable sales in a tough retail landscape.
On October 21, JPMorgan raised its price target for Ulta Beauty, Inc. (NASDAQ:ULTA) to $472 from $450, maintaining an Overweight rating, but noted a cautious outlook for 2025 based on Ulta’s recent Analyst Day presentation. Ulta’s management provided conservative guidance, anticipating that comparable store sales growth may fall below the typical 3-4% range and operating margins could dip under 12%, reaching a minimum of 11%. This suggests flat or potentially declining earnings for 2025, taking into account projected unit growth, comparable sales, margin pressures, and EPS growth through share repurchases. That said, the analysis indicated that consensus for Ulta’s 2025 EPS is aligning around $23, based on an estimated 1% same-store sales increase and an 11.6% operating margin.
Diamond Hill Long-Short Fund stated the following regarding Ulta Beauty, Inc. (NASDAQ:ULTA) in its Q2 2024 investor letter:
“Still-rising valuations have made identifying attractively valued, long ideas increasingly challenging — though we still found a few in Q2 that we believe the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. We established new long positions in VeriSign, Ulta Beauty, Inc. (NASDAQ:ULTA), Sysco Corporation and Lamb Weston Holdings during the quarter.
Ulta is a leading US specialty beauty retailer. As inflation has remained relatively elevated and consumers have found ways to economize and moderate discretionary spending, we believe Ulta is well-positioned to take share given its compelling portfolio of beauty brands across a range of price points, including its own private-label brand. We believe the current share price fails to account for an attractive outlook for the company and capitalized on a low valuation to initiate a position in Q2.”
While we acknowledge the potential of ULTA, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ULTA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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