Coca-Cola, Pepsi, Monster: 5 Beverage Stocks Hedge Funds Are Drinking Up

Page 1 of 2

BERKSHIRE HATHAWAYAfter identifying the most popular stocks among hedge funds (see our Top Ten here) according to their third quarter 13F filings, we have decided to break down the top five stocks that hedge funds love in the beverage industry. Many of these beverage companies trade as relatively stable stocks and should see growth from volume increases on a bolstering economy. Our list includes the hundreds of hedge funds and prominent investors that are required by the SEC to disclose their public equity holdings quarterly. In order from top to bottom we have outlined the most-loved beverage stocks based on the aggregate number of funds owning each.

The Coca-Cola Company (NYSE:KO) was the top beverage company by far with 58 filers – following a net increase of 10 filers – the largest increase amongst our five stocks. Sales were up over 32% in 2011, driven by full year inclusion of the 2010 acquisition of Coca-Cola Enterprises’ North American operations. Coca-Cola has become more focused on North America with the Coca-Cola Enterprises acquisition and the selloff of its Norway and Sweden bottling operations. Volume is expected to remain solid over the next few years, rising in the high single digits on better penetration of emerging markets. Coca-Cola is Warren Buffett’s top investment as of 3Q—with over 20% Berkshire’s 13F invested in the beverage company (check out all of Warren Buffett’s newest picks).

PepsiCo, Inc. (NYSE:PEP) was in second with 38 filers after a net decrease of 8 filers – the largest decrease of all our five stocks. Unlike Coca-Cola, Pepsi has most of its exposure internationally and has seen weak volume of beverage sales in the Americas. Pepsi expects to have spent upwards of $600 million on brands and marketing in North America by the end of 2012 to help boost its presence in this lagging segment. Compared to top rival Coca-Cola, Pepsi trades with the cheapest P/E – 18x compared to Coca-Cola’s 20x – and the highest dividend – 3% compared to Coca-Cola’s 2.7%. What sets Coca-Cola apart and puts it as the most loved beverage stock may be its growth prospects; KO’s expected five-year EPS growth rate is 8%, double that of Pepsi. 

Monster Beverage Corp (NASDAQ:MNST) had 25 filers owning the beverage company at the end of 3Q to come in third. The energy drink company is down over 30% during the last six months on various concerns over the harmfulness of energy drinks. This could present a buying opportunity for investors, where Monster is expected to grow five-year earnings at 19% annually – the most of our five stocks. Sales grew by 30% in 2011 and are expected to continue their solid growth, with expectations of a 20% marginal increase by the end of this year. Driving this robust growth will be expansion efforts, where Monster recently launched in Ecuador, Hong Kong, Macau and Slovenia, and plans to launch in Chile, Peru and Singapore very soon. Billionaire Jim Simons was the top fund owner of those we track at the end of 3Q with over 3.3 million shares (see all of Jim Simons’ top picks here).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!