Five beer stocks to invest in this summer
Beer stocks are about to get a lot more interesting for investors. Many of them are selling at a discount. But that may not be the case for long.
It is widely reported that during the pandemic, drinking was on the rise. Up. Surprisingly enough, however, people did not turn to their usual drink during quarantine. With few options for “adventure” close at hand, many turned to their local liquor store for a sense of exploration. And it is obvious that risks were taken.
During the pandemic, brandy sales increased 43%. Whiskey sales increased 39%. Sales of fortified wines (such as port and Madeira) increased by 51%. And sales of flavored wines increased by 73%. All these statistics come from Ibotta Analysis. Now you could argue that drinkers were just drinking more of what they like. But here is the kick. Beer sales are down. Declining in some areas of the market.
Global volume of beer in the United States sales fell by 3% in 2020. Sales of craft breweries fell by 9%, however. And the amount of money spent on craft beers fell 22%. The pandemic has hit the beer industry hard. But there are good reasons to believe it won’t be long. When people are able to shake off the itch of adventure beyond the bottle, we will see a return to old ways. And it turns out that we have entered the period where old habits are most likely to return.
Beer drinking season
Memorial Day sets off a potentially profitable trend for investors. Namely: the season of beer consumption. Matthew Carr, the chief trends strategist at the aptly named Profit Trends, pointed out this phenomenon almost a decade ago. And that rings as true today as it did then… if not more. As Matthew notes:
You see, Memorial Day weekend is when Americans really start putting out their summer gear …
Few things go better with sitting outside, enjoying the warm weather and the company of friends than a good cold.
After Memorial Day, there is Father’s Day, July 4th, and Labor Day. Then we have Thanksgiving, the winter holidays, the New Years and the Super Bowl. These are all some of the best days of the year to drink beer. So, these days, the beer drinking season is expected to stretch from Memorial Day to the Super Bowl. And that means it can be a very profitable time of year for brewing companies… and shareholders.
Five stocks of beer for the beer drinking season
- Ambev (NYSE: ABEV)
- Anheuser-Busch InBev (NYSE: BUD)
- Boston Beer Co (NYSE: SAM)
- Constellation brands (NYSE: STZ)
- Molson Coors Drink (NYSE: TAP)
One of the largest brewers in Latin America, Ambev is the largest Brazilian company in terms of market capitalization. It is also the third largest in the entire southern hemisphere. And yet, its share is negotiated for a ridiculous sum.
Ambev’s profits for fiscal 2020 fell 3.7%. And that naturally lowered its share price a bit. But the company’s sales volume has been heavily impacted by regional restrictions linked to the pandemic. In the short term, it’s unclear when restrictions in Ambev’s 16 countries will be relaxed. However, in the long term, Ambev is well positioned with a focus on Central America and Latin America, which are made up of several emerging economies. A growing middle class and high economic growth rates make Ambev a beer store to watch very closely.
The world’s largest brewer has a real grip on the industry. With over 500 brands of beer in its product line, the company manufactures 17 individual beers that generate over $ 1 billion in annual sales. And it owns half of the 10 best-selling beer brands in the world. Nonetheless, the pandemic has hit InBev quite hard. But it’s well placed for a rebound when backyard barbecues return.
Famous names like Budweiser, Bud Light, and Stella Artois are sure to stock up on coolers this summer. InBev is also making significant strides in the $ 3 billion hard seltzer water industry. He currently offers Bud Light Seltzer, BL Lemonade Seltzer, BonV! V, Natty Seltzer and Michelob Ultra Seltzer. It will also market Travis Scott’s CACTI hard seltzer line. In addition, the reopening of neighborhood bars and restaurants should play a major role in boosting sales of old and new product lines. This makes it a beer stock to pick up ahead of the release of sales figures at the end of the quarter.
Boston Beer Co
Lager maker Sam Adams has continued to defy logic as its revenues continue to grow at breakneck speed. The company, which started out with a simple Viennese lager, has always managed to stay one step ahead of much of the competition.
Before the growing interest in ciders, Boston Beer had several on the market. It launched a line of hard iced teas in 2001, under the name Twisted Tea. And the company was at the same pace as White Claw when it introduced its first hard seltzer, as Truly in 2016. Now Boston Beer stock doesn’t come cheap. But with advancements in investment opportunities, you don’t have to shell out $ 1,000 for a full share of that beer stock. By using trading apps like Stockpile or Robinhood, you can now invest in fractional shares. (Many discount brokerage firms allow this as well.) So even a $ 20 investment can grow in value as quickly as a larger investment. And that makes it one of the most attractive beer stocks on our list.
Constellation is one of the more diverse choices on our beer inventory list. It produces and distributes a wide range of beers, wines and spirits. And this diversification has helped her not only resist the pandemic, but thrive during it.
Even though its stock price rose only 10% over the year (about 2% lower than the S&P 500), it outperformed consumer staples. And the ace up its sleeve is a $ 4 billion investment in Canopy Growth. Canopy and its American counterpart, Area of assets (OTC: ACRHF), are launching THC-infused drinks in California and Illinois this summer. This could to be the next big thing in the industry. According to Matthew Carr:
Infused drinks are considered a game changer for the US market. And the segment offers the highest growth potential not only in 2021 but in the years to come…
Today, cannabis infused drinks are still in their infancy …
But this is one of the product launches that we have been waiting for for a few years.
Whether it’s for their beer, wine, spirits, or their next line of cannabis infused products, Constellation Brands is definitely a beer stock to consider complementing your portfolio with.
Molson Coors Drink
This legendary brewer was founded in 1873. And it has since grown into one of the greatest brewers in the United States With household names like Miller, Miller Lite, Crispin Cider, Blue Moon and of course Coors and Molson, this juggernaut has made inroads into international markets. Lately, the company has made giant strides in Europe, Latin America, Asia and Africa. However, much of this progress has yet to be made due to pandemic lockdowns. But when the restrictions wear off, Molson Coors’ profits are expected to increase exponentially. And that makes it one of our favorite beer stocks to consider investing in.
The result on beer stocks
Beer stocks are most often seen as a long-term game. And they can certainly function as such. They are also often viewed as recession-proof investments … Even if that was before foreclosure-induced recessions were factored in.
The pandemic has hit many of the biggest beer makers hard. But reducing profits should only be a temporary problem. Beer has been around far too long to simply fade into the background. And really, who is drinking brandy at this summer’s family reunion?
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