December 21, 2011 | includes: CPB, DF, KFT, KO, PEP, SLE, STZ
Article from Seeking Alpha
Food and beverage companies tend to be a somewhat safe bet. Many people will continue to buy their favorite soda or snack food no matter how tight money gets. This fact tends to translate into a beta that is around 0.50, give or take, meaning the companies in this industry tend to be roughly half as volatile as the market. And, because growth tends to be slow, there is typically a dividend involved. All in all, food and beverage companies are pretty decent investments – the only question is which ones to buy.
To answer this, we look to hedge funds. They have entire teams studying the markets to answer that very question, so tend to be good to “monkey.” With that in mind, we developed this list of 7 food and beverage companies hedge fund managers are invested in.
The Coca-Cola Company (KO): The number of hedge funds invested in KO went up from the second quarter to the third, increasing from 43 to 44. However, the volume of hedge fund investment declined from $16.76 billion to $16.62 billion. Warren Buffett’s Berkshire Hathaway is a major shareholder of KO, keeping nearly 23% of its portfolio in the company. Ken Fisher’s Fisher Asset Management also had a position in KO at the end of the third quarter.
Kraft Foods, Inc. (KFT): The number of hedge funds invested in KFT also increased in the third quarter, moving from 37 at the end of the second quarter to 42 at the end of the third quarter. The total volume did decrease somewhat. At the end of June, hedge funds had a total $6.01 billion invested in the company, compared to $5.41 billion at the end of September. KFT is popular with Warren Buffett’s Berkshire Hathaway as well as Bill Ackman’s Pershing Square, Jean-Marie Eveilard’s First Eagle Investment and George Soros’ Soros Fund Management.
PepsiCo, Inc. (PEP): PEP was a top holding in 38 hedge funds at the end of the third quarter, down from 41 at the end of the second quarter. The total volume of hedge fund interest in the stock also fell. Hedge funds had $1.66 billion invested in the company at the end of June, compared to just $1.58 billion at the end of September. George Soros’ Soros Fund Management, Ray Dalio’s Bridgewater Associates and Ken Fisher’s Fisher Asset Management are fans of PEP.
Campbell Soup Co. (CPB): Hedge fund investment in CPB fell sharply in the third quarter. It moved from $701.17 million at the end of the second quarter to $55.76 million at the end of the third quarter. The number of hedge funds invested in the company declined from 19 at the end of June to 15 at the end of September. CPB is a favorite of both Tom Gayner’s Markel Gayner Asset Management and Joel Greenblatt’s Gotham Asset Management.
Dean Foods Company (DF): DF is a top pick for 16 hedge funds as of the end of the third quarter. The total volume of hedge fund investment at the end of September was $107.65 million. This was considerably lower than the second quarter, when the total number of hedge funds invested in the company was 17 and the volume at $176.19 million. DF is a top pick for David Tepper’s Appaloosa Management, Ray Dalio’s Bridgewater Associates and David Dreman’s Dreman Value Management.
Sara Lee Corp. (SLE): The number of hedge funds invested in SLE at the end of the third quarter was at 30, no change from the end of the second quarter. However, the volume of the positions held by those 30 funds did decline somewhat, moving from $1.26 billion at the end of June to $1.07 billion at the end of September. SLE is a favorite of Dan Loeb’s Third Point, Jean-Marie Eveillard’s First Eagle Investment and George Soros’ Soros Fund Management.
Constellation Brands, Inc. (STZ): STZ as a top pick for 15 hedge funds in the third quarter, down from 16 at the end of the second quarter. The total volume of hedge fund investment also declined, going from $118.05 million at the end of June to $74.86 million at the end of September. Ray Dalio’s Bridgewater Associates, David Dreman’s Dreman Value Management and Jean-Marie Eveillard’s First Eagle Investment are fans of STZ.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
