Beer Loses Fizz as Spirits Gain Popularity: Top 10 Stocks to Buy

5. Brown-Forman Corporation (NYSE:BF-A)

Number of Hedge Fund Investors  in Q1 2024: 30

Brown-Forman Corporation (NYSE:BF-A) is one of the largest and oldest alcoholic beverage companies in the world. It is a diversified spirits company that sells whiskey, tequila, gin, and rum. This means that the Brown-Forman Corporation (NYSE:BF-A) is positioned well to capitalize on the growing spirits market in America. However, its shares are down by 23% year to date, hurt particularly by Brown-Forman Corporation (NYSE:BF-A)’s reliance on its well known whiskey, Jack Daniels. Since Jack Daniels is the firm’s best selling and most popular product, the stock performance is tied to the whiskey’s performance. During Brown-Forman Corporation (NYSE:BF-A)’s second quarter, its Jack Daniels sales dropped by 6% to build on the previous quarter’s 6% sales drop. However, the growth in RTD spirits which we talked about in the intro was also evident in the firm’s product mix, with RTD sales growing by 2% and helping Brown-Forman Corporation (NYSE:BF-A) navigate a tough market through product differentiation.

Madison Mid Cap Fund mentioned Brown-Forman Corporation (NYSE:BF-A) in its Q2 2024 investor letter. Here is what the firm said:

“We also made two adds and two trims during the quarter. We added to Brown-Forman Corporation (NYSE:BF-B) and Thor Industries. Brown-Forman is facing a slight decline in sales, which has elevated investor concern over risks to demand from increased competition and changes in consumer tastes. We believe the long-term outlook for the category and the Jack Daniels brand remains solid.”