by Fred Fuld III
According to research presented at a recent American Heart Association conference, consuming wine may reduce the risk of Type 2 Diabetes. It helps with glucose metabolism, especially when consumed during meals. Over 300,000 people were studied over the last ten years.
For investors, there are ways to participate in the wine industry without having to buy your own winery. Some of the big companies, such as Brown Forman (BF-B) and Constellation Brands (STZ), produce wine as a small part of their business.
But there are more pure plays. Here are some examples.
Willamette Valley Vineyards (WVVI), with a very low $50 million market capitalization, produces Pinot Noir, Chardonnay, Pinot Gris, Pinot Blanc, Rose, Methode Champenoise Brut, and Riesling branded wines. The stock trades at 36 times earnings. Earnings per share growth this year is 53.5%.
The Duckhorn Portfolio (NAPA), with a $2.2 billion market cap, is a Saint Helena, California winery that produces various brands of wine including Duckhorn Vineyards, Decoy, Kosta Browne, Goldeneye, Paraduxx, Calera, Migration, Canvasback, Greenwing, and Postmark. The stock has a trailing price to earnings ratio 38.5 and a forward P/E ratio of 27. Earnings per share growth this year is 86%.
Vintage Wine Estates (VWE), based in Incline Village, Nevada, produces various wines including Laetitia Vineyard and Winery, Swanson Vineyards, Kunde Family Winery, Viansa, and B.R. Cohn Winery brands. The stock has a market cap of $568 million. The stock has a sky high trailing P/E ratio of 92.5, but fortunately has a very reasonable forward P/E of 18.8. Earnings per share growth this year is 128%.
These full bodied stocks have a nice sweetness with the possibility of an excellent finish.
Disclosure: Author didn’t own any of the above at the time it was written.