With the S&P 500 near all-time highs, it isn’t surprising that many alcohol names have done very well. Alcohol stocks combine the stability of a consumer staple with the dividend yield of a mature company to produce a return profile that all shareholders can drink too. Seeing as the smart money recently filed their quarterly 13Fs for the first quarter, let’s take a closer look at the smart money’s favorite alcohol stocks, which include Constellation Brands, Inc. (NYSE:STZ), Molson Coors Brewing Company (NYSE:TAP), Anheuser Busch Inbev SA (ADR) (NYSE:BUD), Ambev SA (ADR) (NYSE:ABEV), and Diageo plc (ADR) (NYSE:DEO).
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
#5 Diageo plc (ADR) (NYSE:DEO)
– Number of Hedge Fund Holders (as of March 31): 19
– Total Value of Hedge Fund Holdings (as of March 31): $1.2 billion
– Hedge Fund Holdings as Percent of Float (as of March 31): 1.60%
Overall, 19 funds among those tracked by Insider Monkey owned shares of Diageo plc (ADR) (NYSE:DEO) at the end of the first quarter, unchanged from the previous quarter. Among the funds that recently established position in the stock is Peter Rathjens, Bruce Clarke And John Campbell‘s Arrowstreet Capital, which bought more than 2 million shares during the quarter. Diageo’s shares are 2.6% in the green year-to-date, aided in part by Diageo naming Javier Ferran as the new Chairman of the board in May. Ferran replaced Dr. Franz B Humer.
#4 Ambev SA (ADR) (NYSE:ABEV)
– Number of Hedge Fund Holders (as of March 31): 24
– Total Value of Hedge Fund Holdings (as of March 31): $415.2 million
– Hedge Fund Holdings as Percent of Float (as of March 31): 0.50%
Although Brazil is in its worst recession since the Great Depression, Brazil’s largest brewer, Ambev SA (ADR) (NYSE:ABEV), has done very well in 2016. Shares are up 20% year-to-date as speculators buy the stock in anticipation of better macroeconomic improvement in Brazil. Aiding the bullish thesis for Brazil’s economy are rising crude prices and political change. The valuation of Ambev isn’t stretched either, with the stock trading for 19 times forward earnings estimates, in-line with its peers.