Investor tastes can and do change. But when it comes to beverage stocks to buy in today’s market, big-picture leadership off and on the price chart hints strongly at bullish situations worth buying into.
The month of May is just underway. And following a bear-beating April performance, the best for the broader market since 1987, there’s rightfully been some consolidation. For its part, the S&P 500 is off by about 1.5% after its hefty near-17% rally.
Last month’s solid performance comes on the heels of a record-breaking rebound in late March. And in case you forgot, that trailed a pandemic-driven, record-breaking corrective bear market.
To say that investor tastes can and do change — and sometimes at the drop of a hat — is an understatement. And visually, if the S&P 500 doesn’t quite bring that point home, price charts in large-cap growth names like Shopify (NYSE:SHOP) or Tesla (NASDAQ:TSLA) should offer clarity.
The market action is enough to make an investor ponder the question, “What will tomorrow usher in?” Understandably, it’s hard to know the answer amid a novel coronavirus-tainted earnings season, an unfolding new normal and escalating tensions between the U.S. and China.
Rather than focus on Wall Street’s seemingly day-to-day whims, let’s explore something a bit more bullish. Below are three beverage stocks set to have the “it” factor with investors.
Beverage Stocks to Buy: Monster Beverage (MNST)
Monster Beverage is the first of our beverage stocks to buy. Earnings for the maker of the self-named and popular caffeinated drink are tomorrow night. In front of the quarterly report there’s some analyst chatter of supply-chain disruptions and weaker margins tied to the global pandemic. But don’t think the warnings are the end for Monster. They’re not.
This competitor of Coca-Cola’s (NYSE:KO) timeless soda pop is forecast to show sales growth of 6.7% for the period. Monster has also proven itself a durable player in this market for more than 15 years since first gaining the attention of Wall Street.
And technically, Monster shares are well-positioned for a meaningful upside breakout.
This stock’s monthly price shows a high-level corrective base has been forming for the past 16 months. With the pattern developing around the stock’s prior August 2016 all-time high while maintaining the integrity of its longer-term uptrend, there’s solid evidence shares could be “it” with investors through 2020 and beyond.
Constellation Brands (STZ)
The next name on our list of beverage stocks is Constellation Brands. The diversified adult beverages giant whose brands include Pacifico beer and Robert Mondavi wine has been growing its tendrils, investing in Canada’s largest cannabis producer Canopy Growth (NYSE:CGC).
Last week, Constellation announced it exercised almost 19 million warrants on Canopy shares valued at $174 million. The move increases this stock to buy’s stake to nearly 39% in the Canadian producer as management reaffirmed its belief in the long-term beverage opportunities within the cannabis market.
On the price chart, this stock to buy looks a bit different than shares of Monster. Some might worriedly see a downtrend forming on the monthly chart. What I see is a larger Fibonacci-based two-step or mirror move that’s potentially signaling an end to the correction. That’s based on leg CD extending 1.3% the length of leg AB which sets up the possibility for a bottom to form. There’s more, too.
Constellation shares have held a challenge of the 62% retracement level tied to the 2008 financial crisis. There’s also a solid-looking bullish stochastics divergence from points B to D.
And with April’s inside candlestick supporting a meaningful low, Constellation is a stock to buy on a nearby breakout signal above $171.97.
Boston Beer (SAM)
Not that I’ve saved the best for last, but Boston Beer has certainly proven the most technically dominant of our stocks to buy. My familiarity with this beverage company is irrevocably tied to its namesake Sam Adams beer as a much younger adult.
But Boston Beer has proven itself to be much more than that over the years.
Despite Covid-19 dinging Boston Beer’s commercial craft brewing business due to bar and restaurant closures, the outfit’s hard seltzer brand Truly has shown its own wherewithal with today’s consumers and helped counter revenue softness. And consumers aren’t the only one’s buying what Boston Beer is selling.
On the price chart this stock broke out in late April to all-time highs. The market-leading rally out of an irregular corrective cup pattern has taken Boston Beer roughly 10% above the base. It makes shares appear somewhat pricey in the near term.
However, given the larger classically formed base that’s backing up this stock and stochastics signaling room for momentum, it’s time to make SAM’s acquaintance today.
Investment accounts under Christopher Tyler’s management do not own any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.