Beer stocks have gone flat over the past 12 months, but stocks that are in the distillery business have experienced a good buzz—they’re up 14.5 percent during the past 12 months. You still can get into the party, RBC equities analyst Nik Modi says.
“It’s really about the brands,” he says. What’s important to understand in the beverage industry ”is that when you have momentum, don’t get in the way.”
Consequently, Modi recommends Brown-Forman (NYSE: BF; Price: $88.48), which owns Jack Daniel’s whiskey—the “big daddy” of the category, he says—among other brands.
Although beer stocks aren’t performing as well, Modi says good deals remain in the industry. He recommends Constellation Brands (NYSE: STZ; Price: $82.36), which owns craft brews, because, like Brown-Forman, the company does a great job of managing its brands.