In this article, we will take a look at the 8 Best “Sin Stocks” to Buy for Recession Protection.
US equity market futures fell early on June 22 as Wall Street reviewed the latest developments in US-Iran peace talks and awaited vital inflation data closely monitored by the Fed. The market slumped following comments from mediators Qatar and Pakistan that US and Iranian officials had reached terms on a plan to establish a final peace agreement within 60 days.
On June 18, Tom Lee, head of research at Fundstrat Global Advisors, told CNBC that although a number of key factors could affect markets, “conditions are still favorable for stocks.” However, the firm cautioned that “later this year, there is going to be an abrupt change of market conditions” that might resemble a bear market.
However, Michele Morganti, senior equity strategist at Generali Investments, said the overall market environment remained positive. As stated by the analyst:
“The AI tide is lifting all manufacturing boats, the US economy is holding up well, and EM economies have proved more resilient than in past crises.”
The spotlight is now anticipated to move to PCE inflation figures, which are the Federal Reserve’s favored measure of core inflation. Markets are currently expecting a 25-basis-point rate increase from the Fed in September, as officials signal higher borrowing costs to offset inflation pressures.
With that in mind, let’s take a look at the best sin stocks to buy right now for recession protection.
Our Methodology
For this list, we used the AdvisorShares Vice ETF, which invests in products and services that people enjoy regardless of the economic situation. VICE seeks long-term growth from select global companies involved in “vice” industries such as alcohol, tobacco, and gaming. To further narrow the list, we used hedge fund sentiment and positive analyst commentary. Our final list is ranked in ascending order based on the number of hedge funds holding bullish positions in each stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
8. Alto Ingredients, Inc. (NASDAQ:ALTO)
Number of Hedge Fund Holders: 21
Alto Ingredients, Inc. (NASDAQ:ALTO) ranks among the best sin stocks to buy for recession protection. On May 7, H.C. Wainwright analyst Amit Dayal boosted Alto Ingredients, Inc. (NASDAQ:ALTO) price target to $10 from $5.50, maintaining a Buy rating on the company’s stock. The firm claims that improvements in macroeconomic conditions for the renewable fuels sector in recent quarters have led to “an environment for steady operational profitability for the business that was lacking previously.”
Moreover, a day earlier, the company posted Q1 2026 results with net income of $4.0 million, compared with a net loss of $12.0 million in the same quarter of the previous year. The recovery was most apparent in adjusted EBITDA, which hit a positive $4.7 million from negative $4.4 million in the first quarter of 2025.
With a $11.3 million increase in gross profit, the Pekin Campus led the recovery, going from a $3.1 million deficit to an $8.2 million gain. The site, consisting of dry mill, wet mill, and yeast plant activities, profited from a better product mix and the incorporation of 45Z tax credit benefits.
Alto Ingredients, Inc. (NASDAQ:ALTO) produces and distributes specialty alcohols, renewable fuels like ethanol, and essential ingredients derived mainly from corn.
7. Ambev S.A. (NYSE:ABEV)
Number of Hedge Fund Holders: 21
Ambev S.A. (NYSE:ABEV) ranks among the best sin stocks to buy for recession protection. On May 6, Bernstein SocGen Group boosted its price target for Ambev S.A. (NYSE:ABEV) to $3.73 from $3.42, while keeping a Market Perform rating on the company’s shares. The firm reported that the Brazilian beer market continued to fall in the mid-single range, with the company indicating a 3% drop in a sell-side follow-up discussion as weather conditions remained challenging.
According to Bernstein, Ambev S.A. (NYSE:ABEV) has achieved solid volume success, despite the fact that the whole market has yet to return to growth. According to the firm, comparisons will become easier beginning in the second quarter of 2026, with World Cup tailwinds forecast.
Additionally, management described Ambev’s Q1 2026 results, which were released a day earlier, as a “solid start of the year.” The company’s revenue of $4.33 billion was in line with market expectations, while its earnings per share of $0.0463 exceeded analyst estimates of $0.0446 by 3.81%.
The premium segment, which includes brands like Stella Artois, Corona, and Spaten, rose by over 20% during the quarter. Meanwhile, the balanced options portfolio, which includes low-calorie and alcohol-free options, rose by more than 70%.
Ambev S.A. (NYSE:ABEV) produces, distributes, and sells beverages. It manufactures beer, carbonated soft drinks, and various non-alcoholic and non-carbonated products. It functions across the following geographic areas: Brazil, Central America and the Caribbean (CAC), and Canada.
