11 Best Coffee Stocks to Buy Now

Published on December 2, 2022 at 2:40 pm by Usman Kabir in Hedge Funds, News

In this article, we discuss the 11 best coffee stocks to buy now. If you want to read about some more best coffee stocks, go directly to the 5 Best Coffee Stocks to Buy Now.

Coffee is one of the favorite beverages in the world and a major source of caffeine for many, from students to retirees. According to a report by Business Insider, coffee is the second most sought-after commodity in the entire world, with an industry worth over $100 billion across the globe. In terms of exporting alone, the industry is valued at $20 billion and continues to be on the rise — on average, 500 billion cups of coffee are consumed yearly. In the last 50 years, the compounded average yearly growth rate of the coffee industry was 1.9%. In the last two decades, it rose to 2.2%. This increment means that the market size increased by 190%. Latest estimates suggest that 3 billion cups of coffee are consumed each day. Globally, it generates an annual income of $200 billion. In 2019, the world coffee demand was estimated between 164.8 million bags (ICO) and 166.5 million bags. In May 2022, the stock market’s downturn led to a drop in real wages in the industry and started to affect a range of goods and services. However, the price of coffee remains relatively high.

Despite the downturn, consumption has continued to grow. According to a report by the National Coffee Association, in March 2022, coffee consumption among Americans was at a two-decade high. It shows the largest growth of about 14% increase since January 2021. Soft commodities consultant Judith Ganes, president of J Ganes Consulting, recently said a stock market downturn would not hurt overall coffee consumption. The expert believes that coffee will remain an affordable beverage and people don’t want to give it up.

In an interview in October 2022, Vanusia Nogueira, an executive director at the International Coffee Organization, said that consumers will choose drinking coffee at home over cafes and restaurants due to rising inflation and risks of recession in coming months. Similarly, other market experts predict that as inflation rises and the prices of goods increase, people may socialize more over coffee as they may skip having lunch or dinner out with friends, and grab a coffee instead.

Coffee stores around the world have been rebounding from pandemic lows in recent months. According to a report by World Coffee Portal, the number of coffee stores in the United States has increased beyond levels seen in 2020. The report underlines that there are 38,411 branded coffee shops in the US, up 2.8% compared to pre-pandemic levels. Some of the top brands in the industry include Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD).

Image by Free-Photos from Pixabay

Our Methodology

The companies that operate in the coffee and beverages sector were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Best Coffee Stocks to Buy Now

11. Coffee Holding Co., Inc. (NASDAQ:JVA)

Number of Hedge Fund Holders: 2

Coffee Holding Co., Inc. (NASDAQ:JVA) manufactures, roasts, packages, markets, and distributes roasted and blended coffees in the United States, Australia, Canada, England, and China. In mid-September, the company posted earnings for the third quarter of 2022, reporting earnings per share of $0.02 and a revenue of $17 million, up more than 25% compared to the revenue over the same period last year.

At the end of the third quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $1.3 million in Coffee Holding Co., Inc. (NASDAQ:JVA), compared to 2 in the preceding quarter worth $1.2 million.

Just like Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD), Coffee Holding Co., Inc. (NASDAQ:JVA) is one of the best coffee stocks to buy now according to elite investors.

10. Farmer Bros. Co. (NASDAQ:FARM)

Number of Hedge Fund Holders: 4

Farmer Bros. Co. (NASDAQ:FARM) engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and other allied products in the United States. On November 3, Enterprise Products Partners posted earnings for the first quarter of 2022, reporting losses per share of $0.39, missing market estimates by $0.06. The revenue over the period was $121.4 million, up 12.0% compared to the revenue over the same period last year and beating market estimates by $2.6 million.

At the end of the third quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $8 million in Farmer Bros. Co. (NASDAQ:FARM), compared to 6 in the preceding quarter worth $8.3 million.

9. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)

Number of Hedge Fund Holders: 9

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a franchise bottler that produces, markets, sells and distributes Coca-Cola trademark beverages. It also sells revitalizing coffees and teas. On November 28, Volvo-owned Renault Trucks announced that Coca-Cola has successfully implemented the introduction of electric trucks for delivery. Coca-Cola Europacific Partners will be using 30 electric trucks for last-mile deliveries to local Belgium customers. Coca-Cola Europacific looks to establish one of the largest EV delivery fleets in Belgium in the coming months.

On October 26, Barclays analyst Benjamin Theurer maintained an Overweight rating on Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) stock and raised the price target to $72 from $65, noting that the company reported a strong performance despite headwinds.

At the end of the third quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $462 million in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), compared to 6 in the previous quarter worth $461 million.

8. SunOpta Inc. (NASDAQ:STKL)

Number of Hedge Fund Holders: 20

SunOpta Inc. (NASDAQ:STKL) manufactures and sells plant-based and fruit-based food and beverage products to retail customers, food service distributors, branded food companies, and food manufacturers worldwide. The firm owns the top brands for non-dairy coffee creamers. On October 13, SunOpta said that it will sell its sunflower business to Pacific Avenue Capital Partners for $16 million. After the acquisition, the business will become Sunrich products. It will continue to be led by the same general manager and employee team.

At the end of the third quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $332.2 million in SunOpta Inc. (NASDAQ:STKL), compared to 21 in the previous quarter worth $338.6 million.

In its Q3 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and SunOpta Inc. (NASDAQ:STKL) was one of them. Here is what the fund said:

“On an individual holdings basis, top contributors to return included WESCO International, Mr Cooper Group and SunOpta Inc. (NASDAQ:STKL). SunOpta is a leading global company focused on natural food, ingredient sourcing, organic food and specialty foods. Revenue growth has been driven by strong demand for its plant-based products, and the company’s pricing power has mitigated the impact of inflation.”

7. Keurig Dr Pepper Inc. (NASDAQ:KDP)

Number of Hedge Fund Holders: 23

Keurig Dr Pepper Inc. (NASDAQ:KDP) operates as a beverage company in the United States and internationally. It markets specialty coffee, hot and iced teas, hot cocoa and other beverages. On November 9, Keurig Dr Pepper Inc. announced a minority stake in the Massachusetts-based Athletic Brewing Company. The $50 million investment in the non-alcoholic craft beer company follows a prior investment in the non-alcoholic ready-to-drink cocktail brand Atypique.

On October 31, Barclays analyst Lauren Lieberman maintained an Overweight rating on Keurig Dr Pepper Inc. (NASDAQ:KDP) stock and raised the price target to $45 from $41, noting that despite the ongoing debate spurred by the company’s coffee business, Keurig Dr Pepper is a relatively attractive domestic defensive play.

At the end of the third quarter of 2022, 23 hedge funds in the database of Insider Monkey held stakes worth $539.1 million in Keurig Dr Pepper Inc. (NASDAQ:KDP), compared to 29 in the previous quarter worth $630 million.

6. The J. M. Smucker Company (NYSE:SJM)

Number of Hedge Fund Holders: 38

The J.M. Smucker Company (NYSE:SJM) manufactures and markets branded food and beverage products worldwide. It owns top coffee brands like Folgers, Dunkin’ Donuts, and Café Bustelo. On November 21, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $2.40, beating market estimates by $0.21. The revenue over the period was $2.21 billion, up 7.8% compared to the revenue over the same period last year and beating market estimates by $30 million.

On November 22, Deutsche Bank analyst Steve Powers maintained a Hold rating on The J. M. Smucker Company (NYSE: SJM) stock and raised the price target to $148 from $145, noting that the company’s underlying sales momentum is incrementally impressive.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in The J.M. Smucker Company (NYSE:SJM) with 1.9 million shares worth more than $264.9 million.

At the end of the third quarter of 2022, 38 hedge funds in the database of Insider Monkey held stakes worth $937 million in The J. M. Smucker Company (NYSE: SJM), compared to 35 in the previous quarter worth $711 million.

In addition to Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD), The J.M. Smucker Company (NYSE:SJM) is one of the best coffee stocks to buy now according to elite investors.

Click to continue reading and see 5 Best Coffee Stocks to Buy Now.

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