This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

7 Alcohol Stocks That Analysts Toast

BOSTON ( TheStreet) -- St. Patrick's Day, college spring break and the first signs of spring come together in March to result in notable instances of alcohol-fueled revelry. That may prompt investors to ponder the health of the alcoholic-beverage industry.

Suffice it to say, it's in recovery from a 2009 recession-induced hangover.

Spending on alcohol is heavily influenced by consumer-discretionary spending, as evidenced by a decline in alcohol sales in 2009 and into early 2010 and a rising tide over the past year, concurrent with the economy's rebound.

Goldman Sachs (GS - Get Report) said in a March 9 research report that it sees beer, wine and liquor sales on an upswing, particularly for "top-shelf," or premium, brands of hard liquor. "Consumers who traded down in the downturn are likely to trade up to more premium variants, benefiting companies with a premium portfolio."

The nation's economic recovery also bodes well for the beer industry, Goldman said, as it will lead to "positive volume growth in the U.S. beer market in 2011 and 2012, following the declines in 2009 and 2010."

The global investment bank estimates increases in the volume of beer sold will rise by 2.5% this year and 1.5% in 2012, "bringing beer volumes back to 2008 levels by the end of 2012."

But investors clearly are out of step with industry trends, or at least analysts' opinions, as the "beverages brewers" stock category as tracked by Morningstar is down 22% this year and off 40% over the past 12 months. But, curiously, after the economy's and industry's slump in 2008, beverage brewers gained 209% in 2009 while sales were still in the doldrums.

And the "beverages -- wineries and distilleries" index as tracked by Morningstar is down 1.3% this year, but up 27% over the past year, through March 11. The S&P 500 Index is little changed this year and up about 15% over the past 12 months.

In addition to Goldman Sachs, Standard & Poor's analysts are also bullish on the liquor and wine industries, saying in a recent research note that "our fundamental outlook for the distillers and vintners sub-industry is positive, reflecting our view of favorable demographics, strong consumption trends that we foresee, and a possible easing of pricing pressures.

"With demand for premium beverages expected to rise, we think companies offering high-end products and a selection of imported wines will benefit, allowing these companies to capture market share from domestic brewers," S&P said.

On the following pages are seven of the most highly rated alcoholic-beverage companies:

1 of 8

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BUD $122.54 0.00%
DEO $111.95 0.00%
GS $207.80 0.00%
SAM $263.01 0.00%
STZ $118.28 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs