John Ballard, The Motley Fool
5 min read
The best brands can keep growing for decades, but sometimes the market offers investors a chance to buy them at a discount. As of premarket trading on Nov. 5, Celsius Holdings (NASDAQ: CELH), Hershey (NYSE: HSY), and Dutch Bros (NYSE: BROS) traded roughly 26% to 53% below their 52-week highs.
Inflation and high gas prices have taken their toll on these brands this year. Here’s why these three beaten-down stocks are worth buying now and holding for the next 10 years.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Celsius
Celsius shares are down about 51% from their 52-week high as sales of the flagship Celsius brand slipped and higher aluminum and fuel costs squeezed margins. Still, the energy drink market remains a long-term tailwind for leading brands. Management expects Celsius to return to growth in 2027 as it prepares to launch new flavors and products. The stock’s sell-off is a great opportunity to buy shares at a modest valuation.
The company holds a 21% share of the U.S. energy drink market. Each of its three brands serves a different market: Celsius for health-conscious consumers, Alani Nu as an entry point for new female consumers, and Rockstar for traditional energy drinkers.
Alani Nu is leading the charge. Core Alani Nu sales grew about 50% year over year in the third quarter, and its category share rose nearly three percentage points to about 10%. Management says Alani Nu remains under-penetrated in channels where Celsius is already strong, suggesting it can sustain strong growth.
International markets remain a big opportunity. Non-U.S. revenue grew about 56% last quarter, and management expects markets outside the U.S. to exceed 15% of total revenue within five years. Aided brand awareness has roughly doubled in the U.K. and France since early last year.
The stock trades at about 18 times analysts’ 2027 earnings estimate, with analysts expecting 10% annualized earnings growth over the long term. That’s a fair valuation for a portfolio that’s still attracting new consumers to a growing energy drink market.
Hershey
Hershey shares are about 26% below their 52-week high. Price increases to cover higher cocoa costs have cut into sales volumes, and management noted higher gas prices are pressuring consumers. But this is a top consumer brand that should continue to pay dividends and reward patient investors.
