Is Ambev (ABEV) A Worthy Investment Choice?

Broyhill Asset Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the full year ending December 31, 2021, Broyhill generated low-to-mid-twenties returns on equities. Overall performance varied depending on individual account asset allocations, legacy positions, and capital flows. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Broyhill Asset Management, in its Q4 2021 investor letter, mentioned  S.A. (NYSE: ABEV) and discussed its stance on the firm. Ambev S.A. is a State of São Paulo, Brazil-based brewing company with a $46.3 billion market capitalization. ABEV delivered a 2.86% return since the beginning of the year, while its 12-month returns are up by 2.49%. The stock closed at $2.88 per share on February 19, 2022.

Here is what Broyhill Asset Management has to say about Ambev S.A. in its Q4 2021 investor letter:

“Shares of Ambev struggled to buck the double-digit decline in emerging market indices in the second half of the year. Consensus concerns around commodity cost headwinds certainly didn’t help matters, but beyond short term margin pressures, te business continue to grow their profits as well as their economic moats.

Ambev, its publicly traded subsidiary, enjoys an even stronger local competitive advantage, with nearly two-thirds market share in Brazil, its largest market, and a number one or number two position in each of its other markets. Shares are currently trading more than 50% below the highs reached in 2018 as weak local currencies have weighed on margins (the majority of Ambev’s cost of goods are denominated in dollars) and macro concerns have weighed on the region, which has suffered years of capital outflows. Despite these headwinds, Ambev reported record volume in every quarter last year, months after reporting its lowest volume in history during the pandemic. Should capital decide to return to Brazil and emerging markets (more on this later), we’d expect Ambev to be a primary beneficiary as the stock remains one of the largest, most profitable, and most liquid names in the index, operating in one of the consumer industry’s largest and most relevant sectors.”

Our calculations show that Ambev S.A. (NYSE: ABEV) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ABEV was in 16 hedge fund portfolios at the end of the third quarter of 2021, compared to 15 funds in the previous quarter. Ambev S.A. (NYSE: ABEV) delivered a -5.88% return in the past 3 months.

In November 2021, we also shared another hedge fund’s views on ABEV in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.