5 Best Coffee Stocks to Invest In

3. The Kroger Co. (NYSE:KR)

Number of Hedge Fund Holders: 41

The Kroger Co. (NYSE:KR) sells its own branded coffee in the US. As of the end of the third quarter of 2023, 41 hedge funds tracked by Insider Monkey had stakes in Kroger. The most significant stakeholder of The Kroger Co. (NYSE:KR) was Warren Buffett’s Berkshire Hathaway which had a $2.2 billion stake in the company.

Oakmark Equity and Income Fund made the following comment about The Kroger Co. (NYSE:KR) in its Q3 2023 investor letter:

“The Kroger Co. (NYSE:KR) is the second-largest grocery retailer in America behind only Walmart. Although the grocery industry is highly competitive, Kroger’s scale advantages allow it to offer a more compelling value proposition than smaller peers and earn higher returns on capital. In recent years, the market has assigned Kroger a lower multiple due to concerns that e-commerce would disrupt traditional brick-and-mortar grocery. However, we believe the company’s performance through the pandemic highlighted that its store footprint, distribution infrastructure, technology investments and strong brand all position the company well for a world with higher online grocery adoption. The stock trades for just 10x our estimate of next year’s EPS, which we believe is attractive given Kroger’s competitive positioning and earnings growth outlook. The pending merger with Albertsons has the potential to drive accelerated earnings growth and further scale advantages. If the merger is not approved, the company will have the capacity to return approximately 25% of its market cap to shareholders.”