7 Best Wine Stocks To Buy Now

4. The Duckhorn Portolio, Inc. (NYSE:NAPA)

Number of Hedge Fund Holders: 12

One of the Largest Publicly Traded Liquor Companies in the US, The Duckhorn Portfolio, Inc. (NYSE:NAPA) is a ‘one-stop luxury wine shop’ and the largest pure-play luxury wine company in the U.S. The California-based winemaker posted a revenue of $93.53 million in its Q3 ending April 30th 2024, an increase of 1.4% from the same quarter last year and surpassing analysts’ estimates by 0.37%. This marked the first time that NAPA has surpassed consensus revenue estimates in the last four quarters. On the 30th of April 2024, Duckhorn announced the completion of its acquisition of Sonoma-Cutrer Vineyards, one of the largest and fastest-growing luxury Chardonnay brands in America, from the Brown-Forman Corporation. Moreover, the company is also investing in revamping its distribution network by focusing on wholesale distributors.

However, NAPA’s dependence on luxury wines is proving to be a problem in current times as consumers are watching their wallets. As a result, the company witnessed a volume decline of 4.6% in the last quarter, and now the revamped distribution channel also leaves it vulnerable to a significant channel glut in case of demand slowdown.

Merion Road Capital Management stated the following regarding The Duckhorn Portfolio, Inc. (NYSE:NAPA) in its Q2 2024 investor letter:

“During the quarter I exited our position in The Duckhorn Portfolio, Inc. (NYSE:NAPA) at a loss. Fundamentals came in worse than I expected and I ultimately realized that because the upside was less than my prior expectations, it did not justify current uncertainty.”