We recently published a list of 10 Benjamin Graham Stocks for Defensive Investors. In this article, we are going to take a look at where Brown-Forman Corporation (NYSE:BF-B) stands against other Benjamin Graham stocks for defensive investors.
Markets in early 2025 are a bit like a moody spring—75 degrees one day, stormy the next. After a strong run in 2023 and 2024, the S&P 500 dropped over 5% year-to-date as investors digested a mix of policy uncertainties, uncertainty around interest rate cuts, and pockets of corporate underperformance. Many stocks are being re-priced as investors grow more selective, and earnings outlooks weaken. At the same time, the bond market is quietly signaling a shift. Treasury yields are still elevated, but there’s a growing sense that the Fed may be near the end of its hiking cycle. That has made Treasury and investment-grade bonds more attractive, especially compared to volatile equities. The market is in transition. Investors are moving from chasing momentum to seeking quality. Caution, realism, and discipline are back in style, and so are value stocks.
Preparing for a potential recession is less about panic and more about applying timeless principles—many of which were championed by Benjamin Graham, the father of value investing. Graham taught that the key to long-term investment success lies in discipline, patience, and a deep understanding of value. In uncertain economic times, those lessons are more relevant than ever. Graham said in his book The Intelligent Investor:
“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
Rather than trying to time the market, investors should focus on building a portfolio grounded in quality and resilience. Graham favored companies with strong fundamentals, conservative balance sheets, and consistent earnings power—attributes that tend to shine when the economy slows. Dividend-paying stocks with a history of reliability also fit neatly into Graham’s framework, offering both income and a margin of safety. Graham said in The Intelligent Investor:
“The essence of investment management is the management of risks, not the management of returns.”
Diversification, another core tenet of Graham’s philosophy, helps investors avoid overexposure to any one sector or asset class. Holding a variety of investments—equities, bonds, and even cash—can smooth returns and provide flexibility. Graham often emphasized the importance of keeping a cash reserve, not just for protection, but as a source of opportunity when market prices become irrationally low.
Graham said, “The investor’s chief problem—and even his worst enemy—is likely to be himself.” Emotional discipline, especially during turbulent markets, is essential. By remaining rational, reassessing risk exposure, and maintaining a long-term mindset, investors can navigate recessionary periods with the confidence that volatility, like all market conditions, is temporary—and often presents some of the best chances to buy quality assets at a discount.
Our Methodology
We used the Classic Benjamin Graham Stock Screener by Graham Value to compile a list of the 10 Benjamin Graham stocks for defensive investors. We considered the top 20 stocks on our screen and picked the ones with the highest number of hedge fund investors, as of Q4 2024. The stocks are sorted in ascending order of hedge fund sentiment.
At Insider Monkey we are obsessed with 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Benjamin Graham
Brown Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders: 38
Brown-Forman Corporation (NYSE:BF-B) is the largest American-owned spirits and wine company with a global presence. The company produces and markets over 30 alcoholic beverage brands, with Jack Daniel’s Tennessee Whiskey as its flagship product—the top-selling American whiskey globally. Other notable brands include Finlandia vodka, Southern Comfort liqueur, Canadian Mist whisky, and el Jimador tequila.
Brown-Forman’s Q2 Fy 2025 net sales declined 5% reported, but were flat organically after adjusting for divestitures and FX. Strong growth came from Woodford Reserve, Diplomatico, and Old Forester, while tequila brands el Jimador and Herradura faced headwinds in the US and Mexico. Jack Daniel’s showed improving trends, bolstered by RTD innovation and global expansion. Brown-Forman Corporation (NYSE:BF-B) expects organic net sales and operating income growth of 2% to 4% in fiscal 2025, driven by strength in international markets, normalizing inventory trends, and a shift toward premiumization in its portfolio.
Growth in Brazil, along with innovation in Mexico, is helping to offset declines in the travel retail channel and developed markets. The company anticipates gains from brands like Gin Mare and Diplomatico, as well as improvements in price/mix and the divestiture of lower-margin brands. However, this outlook is tempered by macroeconomic volatility, higher input costs, and uncertainty around consumer demand. While inventory-related headwinds are easing, inflation and higher interest rates may still impact trade. Brown-Forman (NYSE:BF-B) plans to remain disciplined with SG&A and capital expenditures to manage margin pressures while maintaining a long-term focus on growth.
Overall, BF-B ranks 4th on our list of Benjamin Graham stocks for defensive investors. While we acknowledge the growth potential of BF-B, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BF-B but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.