11 Best Wine Stocks to Buy Now

Published on January 31, 2024 at 2:59 pm by Usman Kabir in Hedge Funds, News

In this article we discuss the 11 best wine stocks to buy now. If you want to skip our detailed analysis of these companies, go directly to 5 Best Wine Stocks to Buy Now.

Broad economic trends such as population growth, the increase in disposable incomes, and cultural changes in Asia are all expected to have a significant impact on the production and consumption of wine across the world in the coming years. Even though the US remains the biggest wine market in the world in terms of value – worth over $66 billion in 2022 per Research and Markets – other countries, like France and China, are beginning to increase wine consumption and catch up to the North American market.

The per capita consumption of wine remains significantly higher in Europe as compared to other parts of the world. In countries like France, Portugal, and Italy, it is around 35 liters per person annually. To put this figure into context, the per capita consumption of wine in the US, the largest wine market in the world, is only around 9.9 liters per person per year. The consumption of wine is on the rise in places like China and Australia. Europe is the largest consumer of the alcoholic beverage in terms of volume and value.

Germany, the US, and the United Kingdom have over the past few years emerged as the largest importers of wine as the production of wine in these places is much lower than the consumption. The US wine market is expected to reach more than $111 billion in value by the end of this decade. Some of the top stocks to monitor in the wine industry in the country include Constellation Brands, Inc. (NYSE:STZ), Diageo plc (NYSE:DEO), and The Duckhorn Portfolio, Inc. (NYSE:NAPA), among others discussed in detail below.

A closer look at the future growth plans of these companies provides further insight into the wine universe. Deirdre Mahlan, the CEO of The Duckhorn Portfolio, Inc. (NYSE:NAPA), recently said during the first fiscal quarter earnings that her company was focused on leveraging brand strength, evolving the portfolio, expanding the wholesale network, and growing the DTC channel to maintain a track record of profitable sales growth even as the macro environment in the wine market remained uncertain at best.

“We’re actively adjusting our DTC approach to respond to changing consumer behavior and tap into the strength at the ultra-high end, and we’re seeing some positive results. For example, although a number of visitors and spend per visitor were soft in the quarter, we’ve seen a strong response to our elevated tasting experiences where spend per person can be considerably higher than our traditional tasting program. From a total volume perspective, Q1 declined 3.4% in line with expectations. Shipments to wholesale declined 3% in the quarter while depletions declined at a slower rate. Wholesale inventories remained at a healthy level and in line with our expectations. While days on hand ticked higher year over year, this was primarily driven by lower than ideal levels during the peak selling season last year. Drilling down within our portfolio, we see performance slightly ahead of the industry overall with some areas of particular strength, including Decoy Limited, which had great success expanding into Merlot.

The evolution of our portfolio is another important growth driver as we leverage our carefully curated collection of luxury wines across a range of price points and taste profiles. While retail sales for the total wine category decelerating in the last 12 weeks, the $15 to $25 segment outperformed Decoy was soft at this price point during the period as the brand absorbed recent price increases and elapsed an unusually strong quarter in the prior year. The impact was mainly in the red varietals as Decoy whites grew ahead of the sub-segment in this period. We remain confident in the brand’s ability to distinguish itself from direct competition within its tier. Our higher price Decoy Limited, as I mentioned, demonstrated continued strength in the quarter with double-digit retail sales growth, and we view this as another proof point that consumers remain willing to pay for luxury wine.

Overall, our market share remains consistent. From a channel perspective, despite a challenging environment, we were pleased to report that our account bases increased in both the on-premise and off-premise channels of the business. We believe this to be testament to the strength of our brands and the confidence of the retailers to take stock in our wine, as well as the distributor and sales team efforts in achieving our goals of addressing the distribution opportunities in the marketplace. To conclude our portfolio of brands performed well in what has proven to be a challenging market environment. While our execution and the strength of our brands partially insulates us from a broader consumer sentiment, we are not immune. Reflecting this climate, we now expect net sales to come in toward the lower end of our guided range, which we are tightening to $420 million to $427 million, or 4% to 6% year-over-year growth.”

Our Methodology

The companies that operate in the wine sector were shortlisted and ranked according to hedge fund sentiment. The analyst ratings of each stock are also discussed to provide readers with some context for their investment choices. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the third quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

A picturesque vineyard in North America with wine barrels in storage.

Best Wine Stocks to Buy Now

11. LQR House Inc. (NASDAQ:LQR)

Number of Hedge Fund Holders: 1

LQR House Inc. (NASDAQ:LQR) provides digital marketing and brand development services for the alcoholic beverage business in the United States. At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $28,000 in LQR House Inc. (NASDAQ:LQR).

Just like Constellation Brands, Inc. (NYSE:STZ), Diageo plc (NYSE:DEO), and The Duckhorn Portfolio, Inc. (NYSE:NAPA), LQR House Inc. (NASDAQ:LQR) is one of the best wine stocks to buy now.

10. Willamette Valley Vineyards, Inc. (NASDAQ:WVVI)

Number of Hedge Fund Holders: 1

Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) produces and sells wine in the United States and internationally. In earnings results for the third quarter of 2023, Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) posted a revenue of more than $9.3 million.The net losses over the period decreased by more than 65% compared to the same time in the preceding year.

At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $493 in Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), the same as in the preceding quarter worth $489.

9. Splash Beverage Group, Inc. (NYSE:SBEV)

Number of Hedge Fund Holders: 4

Splash Beverage Group, Inc. (NYSE:SBEV) engages in the manufacturing, distribution, marketing, and sale of various beverages in the United States. At the end of the third quarter of 2023, 4 hedge funds in the database of Insider Monkey held stakes worth $102,000 in Splash Beverage Group, Inc. (NYSE:SBEV), the same as in the preceding quarter worth $267,000.

8. Vintage Wine Estates, Inc. (NASDAQ:VWE)

Number of Hedge Fund Holders: 5

Vintage Wine Estates, Inc. (NASDAQ:VWE) produces and sells wines and spirits in the United States, Canada, and internationally. Vintage Wine Estates, Inc. (NASDAQ:VWE) recently announced plans to reduce its workforce by around 15% for annualized savings of more than $7 million. The move is part of a restructuring plan that also includes exiting certain non-core, lower margin product and service offerings.

At the end of the third quarter of 2023, 5 hedge funds in the database of Insider Monkey held stakes worth $2.4 million in Vintage Wine Estates, Inc. (NASDAQ:VWE), the same as in the previous quarter worth $3.6 million.

7. Compañía Cervecerías Unidas S.A. (NYSE:CCU)

Number of Hedge Fund Holders: 6

Compañía Cervecerías Unidas S.A. (NYSE:CCU) is a Chile-based beverage company founded in 1902. Compañía Cervecerías Unidas S.A. (NYSE:CCU) is generally viewed in a positive light by analysts heading into 2024. Of the five investment firms covering the company, three have a Buy rating on the stock and two have a Hold recommendation. The average 1-year price target for the firm is around $13.71.

At the end of the third quarter of 2023, 6 hedge funds in the database of Insider Monkey held stakes worth $4 million in Compañía Cervecerías Unidas S.A. (NYSE:CCU), the same as in the previous quarter worth $5 million.

In addition to Constellation Brands, Inc. (NYSE:STZ), Diageo plc (NYSE:DEO), and The Duckhorn Portfolio, Inc. (NYSE:NAPA), Compañía Cervecerías Unidas S.A. (NYSE:CCU) is one of the best wine stocks to buy now.

6. Ambev S.A. (NYSE:ABEV)

Number of Hedge Fund Holders: 14

Ambev S.A. (NYSE:ABEV) is a Sao Paulo-based brewing company. In earnings results for the third quarter of 2023, Ambev S.A. (NYSE:ABEV) posted earnings per share of R$0.25 and a revenue of more than R$20 billion. The normalized organic EBITDA was up more than 43% compared to the last year.

At the end of the third quarter of 2023, 14 hedge funds in the database of Insider Monkey held stakes worth $85 million in Ambev S.A. (NYSE:ABEV), the same as in the previous quarter worth $122 million.

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

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