5 Penny Stocks To Buy That Are Too Cheap To Ignore

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

Number of Hedge Fund Holders: 18

Ambev S.A. (NYSE:ABEV) is a beverage company headquartered in Sao Paulo, Brazil. The firm sells drinks such as beers and soft drinks alongside other products like powdered and natural juices.

Ambev S.A. (NYSE:ABEV) is Latin America’s largest beverage distributor, and the firm is recovering from the devastation of the coronavirus pandemic as its second quarter earnings revealed that it had earned BRL 10 billion in revenue for 15% annual growth and BRL 5.5 billion operating income for an 18% organic annual growth. Ambev S.A. (NYSE:ABEV) is also set to benefit from the FIFA World Cup in Qatar starting in November 2022, as the festivities will see a major demand uptick for its beer.

Ambev S.A. (NYSE:ABEV) pays a 5 cent dividend for a 6.93% yield and its shares are up by 6.25% year to date. As part of their June quarter of 2022 holdings, 18 out of the 895 hedge funds polled by Insider Monkey had invested in the company.

Ambev S.A. (NYSE:ABEV)’s largest investor is Jean-Marie Eveillard’s First Eagle Investment Management which owns 279 million shares that are worth $700 million.

Harding Loevner mentioned the company in its Q2 2022 investor letter. Here is what the fund said:

“This quarter, individual stock selection decisions led to a reduction in our overweight to Consumer Staples. We sold Ambev S.A. (NYSE:ABEV), Brazil’s dominant brewer with strong franchises across South and Central America, which we owned since 2003. Its profit margins have declined in recent years, and management’s strategy to restore them is to entice Brazilians (whose beer consumption is already high) to trade up to premium brands. Despite our high regard for Ambev’s management, we think this strategy will be unsuccessful so long as the Brazilian consumer is under financial pressure from inflation and high unemployment. Ambev is still a high-quality, growing company, but we think there are more appealing opportunities in Brazil and beyond.”