Ahead of Independence Day in the United States, consumers are preparing to celebrate with cookouts and fireworks displays.
Out of the total $9.5 billion that is projected to be spent to commemorate the Fourth of July, the National Retail Federation’s annual survey found that most will be allocated to food for backyard BBQs and picnics. The planned per-person spending is expected to be an average of $93.34 for food items.
Based on these trends, the GuruFocus Aggregated Portfolio, a Premium feature based on 13F filings as of the end of the first quarter, found consumer defensive companies that provide packaged foods and beverages and are popular with gurus include PepsiCo Inc. (PEP, Financial), Coca-Cola Co. (KO, Financial), The Kraft Heinz Co. (KHC, Financial), Tyson Foods Inc. (TSN, Financial) and Constellation Brands Inc. (STZ, Financial).
These types of companies also typically do well in all sorts of market environments since their products are considered necessities.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
PepsiCo
With a combined equity portfolio weight of 21.73%, 26 gurus are invested in PepsiCo (PEP, Financial).
The Purchase, New York-based company, which produces a variety of popular soft drinks and snacks like Lays potato chips, Doritos and Tostitos, has a $254.28 billion market cap; its shares were trading around $184.57 on Monday with a price-earnings ratio of 38.86, a price-book ratio of 14.92 and a price-sales ratio of 2.90.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 83 out of 100, the GF Score indicates the company has good outperformance potential. While it received high ratings for profitability, growth and momentum, the financial strength and value ranks are more moderate.
Of the gurus invested in PepsiCo, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates has the largest stake with 0.20% of its outstanding shares. Diamond Hill Capital (Trades, Portfolio) and Yacktman Asset Management (Trades, Portfolio) also have notable positions in the stock.
Coca-Cola
Twenty-three gurus have positions in Coca-Cola (KO, Financial), representing a combined equity portfolio weight of 22.32%.
The beverage company headquartered in Atlanta, which has well-known brands like Coke, Sprite, Fanta, Powerade, Fairlife and Dasani under its umbrella, has a market cap of $261.53 billion; its shares were trading around $60.48 on Monday with a price-earnings ratio of 26.52, a price-book ratio of 10.37 and a price-sales ratio of 6.05.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 80 implies the company is likely to have average performance going forward, driven by a high profitability rank and more moderate ratings for growth, financial strength, value and momentum.
With a 9.25% stake, Warren Buffett (Trades, Portfolio) is Coca-Cola’s largest guru shareholder. Other top guru investors include Dalio’s, Jeremy Grantham (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, the Yacktman Fund (Trades, Portfolio) and Scotia Canadian Dividend Fund (Trades, Portfolio).
Kraft Heinz
Kraft Heinz (KHC, Financial) is held by 15 gurus with a combined equity portfolio weight of 9.52%.
The Chicago-based company, which is known for Heinz ketchup and Kraft mac and cheese, has a $44.01 billion market cap; its shares were trading around $35.86 on Monday with a price-earnings ratio of 18.30, a price-book ratio of 0.90 and a price-sales ratio of 1.63.
Based on the GF Value Line, the stock appears to be fairly valued currently.
The GF Score of 72 means the company will likely have average future performance on the back of high ratings for profitability and momentum, middling marks for value and financial strength and a low growth rank.
Buffett is Kraft Heinz’s largest guru shareholder with a 26.53% stake. First Eagle Investment (Trades, Portfolio), Bill Gates (Trades, Portfolio)’ foundation trust, Dalio’s firm and Grantham also have sizable holdings.
Tyson Foods
Holding a combined portfolio weight of 7.48%, 14 gurus have positions in Tyson Foods (TSN, Financial).
The processor of beef, chicken and pork products, which is headquartered in Springdale, Arkansas, has a market cap of $18.53 billion; its shares were trading around $52.10 on Monday with a price-earnings ratio of 12.49, a price-book ratio of 0.96 and a price-sales ratio of 0.34.
The GF Value Line suggests the stock is significantly undervalued currently.
Based on its GF Score of 84, the company has good outperformance potential. Tyson raked in high ratings for profitability, growth and value, while the financial strength is more moderate and momentum is low.
Among the gurus invested in the stock, Yacktman has the largest stake with 0.84% of its outstanding shares. The T Rowe Price Equity Income Fund (Trades, Portfolio), Grantham, Dalio’s firm, Simons’ firm, Tom Gayner (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Steven Cohen (Trades, Portfolio), among others, also own shares.
Constellation Brands
Representing a combined equity portfolio weight of 3.33%, 14 gurus are invested in Constellation Brands (STZ, Financial).
The New York-based company, which produces and markets beer, wine and spirits, including brands like Modelo, Corona, Mount Veeder and Casa Noble tequila, has a $45.49 billion market cap; its shares were trading around $248.25 on Monday with a price-book ratio of 5.40 and a price-sales ratio of 5.18.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 73 is supported by high momentum and profitability ranks, moderate value and financial strength ratings and a low growth grade. As such, the company is likely to have average future performance.
Holding 0.38% of its outstanding shares, Grantham is the company’s largest guru shareholder. T. Rowe Price, Dalio’s firm, Simons’ firm, Diamond Hill, Cohen, PRIMECAP, Robert Karr (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio), among sever other gurus, also have positions in Constellation Brands.
Other popular picks
Additional consumer defensive companies that were broadly held by gurus as of the three months ended March 31 included Kellogg Co. (K, Financial), General Mills Inc. (GIS, Financial), Archer-Daniels Midland Co. (ADM, Financial), Hormel Foods Inc. (HRL, Financial) and Diageo PLC (DEO, Financial).
