Lindsell Train, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. In its letter, the fund dug a bit deeper and put some numbers to the phrase by exploring global changes in alcohol consumption and consumer habits. The fund also talked about some quantified optimism about why its efforts to increase the percentage of premium (and extending to out and out luxury) international alcohol brands in its portfolios are a positive move to address these changes, take advantage of opportunities around the world, boost margins over time and lock in the considerable pricing power of its portfolio companies’ collections of unique and compelling beverage brands. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Lindsell Train, in its Q4 2021 investor letter, mentioned Brown-Forman Corporation (NYSE:BF-B) and discussed its stance on the firm. Founded in 1870, Brown-Forman Corporation (NYSE:BF-B) is a Louisville, Kentucky-based spirit and wine company with a $31.7 billion market capitalization, and is currently spearheaded by its CEO, Lawson Whiting. Brown-Forman Corporation (NYSE:BF-B) delivered a -7.15% return since the beginning of the year, while its 12-month returns are down by -3.36%. The stock closed at $67.68 per share on March 28, 2022.
Here is what Lindsell Train has to say about Brown-Forman Corporation (NYSE:BF-B) in its Q4 2021 investor letter:
“Such growth indicates that it’s not mass market tequila shots driving the boom but rather exquisitely crafted Palomas and complex fine sipping tequilas served over ice or even neat. The global rise of interest in cocktails – itself another indicator of consumer tastes turning towards quality over quantity – has been kind to tequila, with the 2021 Bacardi Global Brand Ambassador Survey placing it as the top trending spirit for 62% of global bartenders (rising to 76% in the US) and tequila-based cocktails now ranking 4 of 30 in popularity. We recognise that trends and “booms” have long been a feature of the spirits market, but arguably the combination of demographic behavioural changes and the increased emphasis on truly differentiated flavours as well as heritage and provenance might make shifts like this more durable than in previous years. So we were impressed with our Global portfolio holding Brown-Forman’s 20% growth in tequila volumes in 2021; and despite raised eyebrows at the 2017 Casamigos purchase price of $1bn, we’re pleased that Diageo owns this superpremium tequila and has managed to grow case sales from just 170,000 in 2017 to 1m in 2020. And even more importantly, I did happen to notice in the course of my, er, extensive research that Casamigos has now been immortalised by Claridge’s in a new cocktail named – what else? – “The George”.”
Pixabay/Public domain
Our calculations show that Brown-Forman Corporation (NYSE:BF-B) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Brown-Forman Corporation (NYSE:BF-B) was in 34 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 31 funds in the previous quarter. Brown-Forman Corporation (NYSE:BF-B) delivered a -6.09% return in the past 3 months. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
