We recently published a list of the 10 Best Alcohol Stocks to Buy Now, which includes Ambev S.A. (NYSE:ABEV). Let’s take a detailed look at this stock.
In 2019, global alcohol consumption decreased by 4.7% compared to 2010. The global alcoholic beverages market size was valued at $1.62 trillion in 2021 and is projected to reach $2 trillion by 2031, with a CAGR of 2.2% during the forecast period. Beer is a major driver of the market globally, with North America and Asia-Pacific expected to dominate the market.
According to Forbes, the beer and spirits industry has shown little correlation with economic growth, as their sales are more related to alcohol consumption trends rather than the economy. During economic difficulties, consumers tend to drink more at home, benefiting liquor stores and online alcohol retailers.
Rare whiskeys and wines are also seen as lucrative investment assets. Rare whiskeys like The Macallan 1926 Valerio Adami and Ardbeg single malt have sold for millions, showing their value as investments. The Rare Whisky 101 Apex 1000 Index and Liv-ex Burgundy 150 Index have seen significant gains over the years.
Ambev S.A. (NYSE:ABEV) is a Brazilian brewing company that offers beer under various brand names. Despite a slight decrease in revenue in Q1 2024, the company’s net income remained stable. Ambev has a healthy debt/equity ratio and a positive outlook for the future. With a current forward P/E ratio of 12.42, Ambev is considered an undervalued alcohol stock.
In Q1 2024, Ambev was held by 14 hedge funds, with First Eagle Investment Management holding the largest stake. Overall, Ambev ranks 9th on our list of the best alcohol stocks to buy. While ABEV shows promise as an investment, we believe AI stocks offer greater potential for higher returns in a shorter timeframe.
In conclusion, the alcohol industry remains resilient, with opportunities for investment in both traditional and rare alcohol assets. Investors should consider their options carefully before making any investment decisions.