Coors, Anheuser-Busch Among The 5 Alcohol Stocks Hedge Funds are Getting Drunk On

Page 1 of 2

After identifying the most popular stocks among hedge funds (see our entire Top 10 list here) according to their third quarter 13F filings, we have decided to break down the top five alcoholic beverage companies that hedge funds love. Many of these beverage companies should see a boost from a rise in expected employment that should in turn aid spending on alcoholic beverages. We also like the alcoholic beverage industry given its stability regardless of the economic backdrop. 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 descending order, we have outlined the most-loved alcoholic beverage stocks based on the aggregate number of funds owning each.

Molson Coors Brewing Company (NYSE:TAP)

Diageo PLC (NYSE:DEO) had 19 filers owning the stock, putting it in fifth. Diageo has one of the leading premium alcoholic beverages portfolios with brands that include Smirnoff, Johnnie Walker, Guinness, Baileys and J&B—all in all 14 brands. Diageo trades in line with other premium liquor companies at 24x earnings, but has been penetrating the U.S. market better than others. Diageo now receives over 30% of its revenues from North America and the beverage company expects to see 2013 organic sales of 6% thanks in part to restructuring and focusing more on premium brands. While Diageo trades in line with peers on a trailing basis, its forward P/E of 17x may provide investors with a value play.

Molson Coors Brewing Company (NYSE:TAP) was fourth with a total of 23 filers at the end of 3Q. Being the fifth largest brewer in the world, Molson expects to see lagging growth in 2013 as wine and spirits take market share from beers. Despite the lackluster growth prospects, with its diversified product mix—with such products as Coors, Miller and Blue Moon—the argument could be made Molson is a value play. Trading at the cheapest P/E amongst its peers at only 14x earnings, investors might be over discounting the brewer’s growth prospects, including its acquisition of European brewer Starbev.

Beam Inc (NYSE:BEAM) saw a net increase of 5 filers and called 26 filers owners to be the third most popular alcoholic beverage stock owned by hedge funds in 3Q. Beam has quite a robust suite of brands that afford the spirit company a premium 26x trailing earnings valuation. Some of Beam’s top brands include Jim Beam and Maker’s Mark, while its fastest growing brands include Knob Creek bourbon and Effen vodka. Revenues are expected to be up 5% in 2013, driven by its strong U.S. presence, but expected growth in emerging markets will also play a role. Even with potential growth prospects that might be overlooked by investors – where the spirits company trades at 22x forward earnings compared to 26x trailing – Beam also pays a solid dividend yield of 1.5%.

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

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

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!