5 Best Wine Stocks to Buy Now

3. Diageo plc (NYSE:DEO)

Number of Hedge Fund Holders: 30     

Diageo plc (NYSE:DEO) produces, markets, and sells alcoholic beverages. Latest media reports indicate that Diageo plc. (NYSE:DEO) is exploring the possible sale of a number of beer brands it owns, including popular ones like Smithwick’s, Kilkenny, Harp Lager, and Tusker. Weaker Caribbean and Latin American sales have forced the firm to trim guidance numbers as the region is expected to witness a 20% decrease in organic sales. 

At the end of the third quarter of 2023, 30 hedge funds in the database of Insider Monkey held stakes worth $411 million in Diageo plc (NYSE:DEO), compared to 25 the preceding quarter worth $428 million.

In its Q4 2023 investor letter, Fiduciary Management, an asset management firm, highlighted a few stocks and Diageo plc (NYSE:DEO) was one of them. Here is what the fund said:

“Diageo plc (NYSE:DEO) is the #1 player in the large and attractive global spirits industry, with #1 positions in Scotch, Tequila, Gin, Vodka, and Rum. Total Beverage Alcohol (TBA) is a $950+ billion market, with Diageo at 4.7% of TBA, and aspiring to 6% by 2030. Premiumization in spirits is value creating, and Diageo owns 9 of the top 30 global brands, including Johnnie Walker, Tanqueray, Smirnoff, and Guinness. 12 of Diageo’s top brands are over 140 years old. The company has strong exposure to growth in emerging markets (38% of sales) and has proven to be a superior brand builder. The Diageo portfolio has been optimized, with limited reliance on M&A over the last decade. Capital allocation has been shareholder friendly. Following a period of post-COVID inventory destocking, Diageo trades at its lowest valuation in 10 years.”