The S&P 500 (.INX)’s Five Most Loved Stocks

Brown-Forman
Why are short-sellers avoiding Brown-Forman?

I think we’re beginning to notice a trend here: Short-sellers don’t want anything to do with alcohol distillers! Brown-Forman, the maker of Jack Daniels and Southern Comfort, will avoid a lot of short interest for many of the same reasons as Beam — the price inelasticity of its products, relatively steady product demand, etc. It also doesn’t hurt that Brown-Forman raised its dividend by 9% in November, marking the 29th consecutive year it has boosted its annual payout.

Do investors have a reason to worry?

Despite having more recognizable brands in its liquor portfolio than Beam, I’d say Brown-Forman could be the most shortable stock on this beloved list. Brown-Forman is valued at 23 times forward earnings yet will grow sales by just 5% this year and 7% next year. Whiskey sales have remained strong, but I’d keep a cautious eye on Brown-Forman’s growing expenses and aggressive investments into its business. A 1.4% yield just doesn’t seem like enough to get excited about here.

What S&P 500 darling would you most like to call your own? Share your thoughts in the comments section below.

The article The S&P 500 (INDEXSP:.INX)’s 5 Most Loved Stocks originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of MasterCard. The Motley Fool recommends Beam and Visa.

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