We recently put together a list of the 10 Best NYSE Penny Stocks To Buy. Today, we are going to focus on Ambev S.A. (NYSE:ABEV) and see how it compares to the other NYSE penny stocks.
Recent data from the Consumer Price Index (CPI) released by the Bureau of Labor Statistics on June 12 shows a deceleration in inflation, which could have a positive impact on the US market and economy. This stabilization of prices, especially in essential categories like shelter and food, could provide relief for consumers and potentially influence the Federal Reserve’s monetary policy decisions in a favorable manner. A steady inflation rate could boost consumer confidence and support economic stability.
In the latest inflation report for May released on June 28, personal income in the U.S. saw an increase of $114.1 billion, or 0.5%, while disposable personal income (DPI) also rose by 0.5% to $94 billion, marking its slowest increase since March 2021. The core Personal Consumption Expenditures (PCE) index, which excludes food and energy costs, rose by 0.1% from April, meeting Wall Street’s expectations and slowing down from the previous month. On an annual basis, core PCE increased by 2.6%, the smallest gain in over three years.
The data indicates a steady growth in income and spending, with real DPI growing by 0.5% and real PCE rising by 0.3% due to increased spending on goods and services. Healthcare, housing, and transportation services contributed to the rise in service spending, while prescription drugs drove the increase in goods spending. Overall, the data paints a picture of rising incomes, controlled inflation, and increased consumer spending, suggesting steady economic growth and stability with manageable inflationary pressures.
In terms of small-cap stocks, recent developments from the Fed’s latest meeting suggest some improvement in lowering inflation towards the desired 2% target. While more data is needed to confirm this downward trend, there is speculation that the Fed might cut rates. According to the CME FedWatch Tool, 58% of the market believes that the Fed will cut rates by 25 basis points.
Ambev S.A. (NYSE:ABEV) is the largest beverage company in Brazil, controlling over 60% of the beer market in the country and maintaining a strong presence across Latin America. With a diversified portfolio of both alcoholic and non-alcoholic beverages, the company is strategically positioned to benefit from changing consumer preferences and market opportunities. The Brazilian beer market is projected to grow at a CAGR of over 4.83% from 2023 to 2028, offering significant opportunities for Ambev S.A. to expand its market share and profitability.
In its Q1 2024 earnings call, Ambev S.A. reported its best volume performance in history for beer in Brazil, with a 3.6% growth in beer volumes, outpacing industry performance and indicating market share gains. Premium brands like Corona, Spaten, and Original showed impressive growth, with Corona registering over 70% growth. The company’s strong focus on financial discipline and value creation is evident from its solid free cash flow generation.
With 14 hedge funds holding stakes in Ambev S.A. in the first quarter, the company is seen as a promising investment opportunity. First Eagle Investment Management is the largest shareholder of the company with a position worth $775.509 million as of March 31.
Overall, ABEV ranks 3rd on our list of the best NYSE penny stocks to buy. While ABEV shows potential as an investment, we believe that AI stocks offer greater promise for higher returns within a shorter timeframe. If you’re looking for a more promising AI stock trading at less than 5 times its earnings, check out our report on the cheapest AI stock.
In conclusion, the data suggests a positive outlook for the economy, with controlled inflation and increased consumer spending. Ambev S.A. stands out as a strong contender in the beverage industry with solid growth prospects and a dominant market position in Brazil and Latin America.