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. 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. 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. 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. 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. 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.
6. Accel Entertainment, Inc. (NYSE:ACEL)
Number of Hedge Fund Holders: 29
Accel Entertainment, Inc. (NYSE:ACEL) ranks among the best sin stocks to buy for recession protection. On June 3, Accel Entertainment, Inc. strengthened its Louisiana business with the acquisition of Rice Palace Truck Stop Casino in Crowley, adding a high-volume gaming venue that expands the company’s route-based gaming network in another of its strongest growth markets.
Accel’s Louisiana portfolio now includes 50 video gaming devices (VGDs) thanks to the acquisition, which also offers a chance for immediate operational growth. In comparison to the 728 Louisiana route gaming terminals, Accel Entertainment, Inc. announced at the end of the first quarter of 2026, the company intends to expand the location’s capacity to 60 VGDs, or around an 8% increase.
Despite conflicting operating income trends, Accel Entertainment, Inc. reported a quarterly revenue increase of 8.5% year-over-year earlier this quarter, above analyst forecasts. By the end of the quarter, the company had 28,353 gaming terminals, up 4%, and 4,540 locations, an increase of 3% year-over-year.
Accel Entertainment, Inc. is a distributed gaming operator in the U.S. and a partner for local business owners. Accel offers turnkey full-service gaming solutions to authorized non-casino locations such as bars, restaurants, convenience stores, and fraternal and veteran locations across the U.S.
5. Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)
Number of Hedge Fund Holders: 36
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) ranks among the best sin stocks to buy for recession protection. On June 12, Citizens reaffirmed its Market Outperform rating for Gaming and Leisure Properties, Inc. and kept a $55 price target on the company’s shares. The firm had an optimistic outlook on casino REITs, noting a lack of formal market competition, solid deal pipelines, and robust balance sheets.
This optimistic feeling was highlighted in Gaming and Leisure’s first-quarter performance. The gaming-focused REIT announced earnings per share of $0.82, up 6.49% from the expected $0.77, while revenue came in at $420 million, compared to $417.27 million.
Also during the quarter, Gaming and Leisure Properties, Inc. executed two major acquisitions totaling $727 million. It bought Bally’s Lincoln real estate assets, as well as the land related to The Cordish Companies Live! Casino and Hotel Virginia. Through the acquisitions, the REIT has gained premium assets that boost AFFO per share.
Gaming and Leisure Properties, Inc. is a real estate investment trust (REIT) that acquires, owns, and manages gaming and entertainment properties, such as casinos and racetracks.
4. British American Tobacco plc (NYSE:BTI)
Number of Hedge Fund Holders: 41
British American Tobacco plc (NYSE:BTI) ranks among the best sin stocks to buy for recession protection. On June 8, Morgan Stanley raised its price target for British American Tobacco plc (NYSE:BTI) from GBX 4,900 to GBX 4,950, retaining an Overweight rating on the stock. The new target represents a gain of more than 7% over the existing share price.
Furthermore, in response to British American Tobacco’s first-half 2026 trading statement, BofA Securities reaffirmed a Buy rating on the company’s shares. British American Tobacco plc (NYSE:BTI) reaffirmed its full-year projection for 2026 at the low end of its range. The company estimates a revenue increase of 3% to 5% along with adjusted EBIT growth of 4% to 6%, with results projected to be skewed toward the latter half.
While US vapor performance was noted as a clear winner in the trading statement, results in the Asia-Pacific, Middle East, and Africa areas came in poorer than projected, prompted by weakness in Bangladesh and Heated Tobacco.
British American Tobacco plc (NYSE:BTI) is a leading multi-category consumer goods company that provides tobacco and nicotine products to millions of consumers around the world.
3. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 51
VICI Properties Inc. (NYSE:VICI) ranks among the best sin stocks to buy for recession protection. On June 15, VICI Properties Inc. secured the Carambola Beach Resort in St. Croix, U.S. Virgin Islands, for refurbishment into a Club Med resort, marking the company’s comeback into US territory. VICI Properties Inc. will fund the total renovation of the 150-key facility as part of the joint venture deal, while Club Med will sign a long-term triple-net contract.
Meanwhile, on May 12, Scotiabank boosted its price objective for VICI Properties Inc. from $30 to $32, maintaining a Sector Perform rating on the stock.
The first-quarter earnings in the net lease REIT industry were marked by higher AFFO and investment projections throughout the firm’s coverage, with several REITs offering forward equity either during or after the quarter to meet year-end funding requirements. In that regard, VICI’s AFFO increased 5.7% to $650.9 million from $616.0 million in Q1 2025.
VICI Properties Inc. is a real estate investment trust focused on owning and acquiring gaming, hospitality, wellness, entertainment, and leisure properties that operate under long-term triple net leases.
2. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 52
Churchill Downs Incorporated (NASDAQ:CHDN) ranks among the best sin stocks to buy for recession protection. On June 12, Truist Securities restated its Buy rating and $145 price target for Churchill Downs Incorporated. The firm hosted the company’s CFO, Marcia Dall, and VP, IR, Sam Ullrich, alongside investors in Chicago.
Although investors were centered on the prospects for Derby 2027, not seeing any major developments, management remained optimistic about year-over-year growth and expectations for Derby Week expansion over time.
M&A was also a topic of discussion, with Truist stating that management would consider proposals without considering Derby, though management doesn’t consider recent industry action as a reasonable comparison.
Moreover, on May 26, Stifel reaffirmed its Buy rating and $139 price target for Churchill Downs Incorporated. Since late 2025, the firm has received an increasing number of inquiries from investors about a possible sale or other business moves concerning Churchill Downs’ regional gaming operations. Stifel stated that it is unaware of any M&A conversations but has looked into strategic options, with the firm seeing broader optionality.
Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company. It is anchored by its flagship event, the Kentucky Derby. The company runs its business through three segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming.
1. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 78
Philip Morris International Inc. (NYSE:PM) ranks among the best sin stocks to buy for recession protection. Morgan Stanley boosted Philip Morris International Inc.’s price objective to $200 from $190 on June 3, retaining an Overweight rating on the stock. The firm referenced the company’s planned launch of Zyn Ultra and an IQOS Japan revamp as reasons for the rating.
The same day, Stifel reaffirmed its Buy rating and $195 price target for Philip Morris International Inc. following the company’s presentation at a conference. Stifel restated a Buy rating and a $195 price target for Philip Morris International Inc. after the company’s conference presentation. Philip Morris observed that solid performance in its smoke-free and combustibles businesses helps mitigate headwinds not anticipated in the original forecast, including inflation and conflict-related disruptions.
Moreover, the company’s products, including ZYN ULTRA, will be available in the United States this month in 9mg and 11mg doses in a moist form, as well as 20 pouch cans. Stifel believes the introduction will help Philip Morris improve its market-share momentum and close the product and value gap with peers.
Philip Morris International Inc. operates as a global tobacco company. Its products include cigarettes and smoke-free alternatives. Its smoke-free business also covers wellness and healthcare products, along with consumer accessories such as lighters and matches.
