We recently highlighted the 12 Best FMCG Stocks to Buy According to Billionaire Investors, showcasing some of the most strategically favored companies in the fast-moving consumer goods space. In this article, we examine how Walmart Inc. (NYSE: WMT) compares to other top FMCG stocks that billionaires are buying.
According to McKinsey & Company, the consumer packaged goods (CPG) sector has historically outperformed many other industries, driven by consistent profit margins and strong growth trajectories. However, since 2012, the industry has faced mounting headwinds. These include rising inflation, intensifying competition, changing consumer preferences, and market saturation, all contributing to a more fragmented and complex market landscape.
Elevated interest rates and high industry valuation multiples in recent years have added to these challenges and led to a notable slowdown in merger and acquisition activity. Top CPG companies are now adopting more cautious strategies, prioritizing midsize acquisitions, and focusing on cost optimization and sustainable growth through operational synergies.
What Lies Ahead?
According to McKinsey, the ongoing downward trend in interest rates—combined with the firm’s cash-rich balance sheets of CPG companies and their improved access to affordable debt—could spur increased deal activity in the near future. The firm predicts a mix of three key transaction types: signature, sector-shaping deals, sizable horizontal transactions that drive subcategory consolidation, and strategic spin-offs of brands or business units that no longer fit with their current owners’ growth strategies.
While the consumer sector is broad, much of the analysis has focused on the F&B segment. McKinsey anticipates heightened activity across various CPG areas, especially within personal care and beauty, although the F&B sector is also expected to continue capturing a significant share of transactions.
Different Levers for Growth
Deloitte projects that in 2025, consumer products companies will revamp their product portfolios and mix to better attract consumers while investing in a wide range of demand-generation capabilities. The firm anticipates that these businesses will pursue transformative efficiency measures to generate savings that help finance these strategic investments. Increasing unit volume remains a critical lever for driving profitable growth, according to Deloitte. Moreover, profitable growers within the consumer products space are expected to continue focusing on innovation to re-engage consumers. High-performing companies are also observed to maintain a clear-eyed view of their portfolios, actively divesting and acquiring assets as necessary to optimize growth and performance.
Our Methodology
To compile our list of the 12 Best FMCG Stocks to Buy According to Billionaires, we utilized an advanced screener combined with Insider Monkey’s exclusive database of billionaire stock holdings to pinpoint companies across the broader FMCG space. When multiple stocks featured an equal number of billionaire holdings, we used the number of hedge fund investors as a secondary ranking metric based on data from Q4 2024. We also provided insights into hedge fund sentiments for each stock during the same period.
Why focus on stocks favored by hedge funds? It’s simple: our research shows that replicating the top stock picks of leading hedge funds can outperform the market. Our quarterly newsletter strategy, which selects 14 small-cap and large-cap stocks each quarter, has achieved a remarkable 373.4% return since May 2014—beating its benchmark by 218 percentage points.
Walmart Inc. (NYSE: WMT)
Number of Billionaire Investors: 20
Number of Hedge Fund Holders: 116
Walmart Inc. (NYSE: WMT) operates a network of retail and wholesale stores, clubs, e-commerce platforms, and mobile apps. According to Morningstar, the company is consistently investing in initiatives that attract consumers and strengthen customer loyalty. These strategic investments not only solidify Walmart’s existing customer base but also help capture incremental market share from smaller brick-and-mortar retailers that struggle to keep up with changing consumer trends. Despite a fragmented and competitive landscape, Walmart has carved out an enviable market position, benefiting from its proximity to the majority of US consumers and generating significant repeat foot traffic.
As Walmart Inc. (NYSE: WMT) scales its investments in omnichannel fulfillment and its third-party marketplace, margin pressures are expected to ease. Goldman Sachs maintains a “Buy” rating on Walmart, with a price target of $106, citing the company’s strong positioning to drive robust earnings growth in 2025 through market share gains driven by its value and convenience proposition. Moreover, Walmart’s continued investments in e-commerce infrastructure and technology, coupled with improved logistics and last-mile delivery capabilities, are set to generate significant returns in the coming years.
Overall, WMT ranks second on our list of the best FMCG stocks to buy, according to billionaires. While we recognize Walmart’s investment potential, certain deeply undervalued AI stocks may offer even higher returns over a shorter timeframe. If you’re interested in exploring a promising AI stock trading at less than five times its earnings, check out our report on the cheapest AI stock.
Frequently Asked Question
What does it mean for Walmart (WMT) to be the top FMCG stock pick by billionaires?
It signifies that among fast-moving consumer goods (FMCG) companies, Walmart stands out as a favored investment by high-net-worth individuals, indicating strong market confidence in its growth and performance.
How many billionaire investors currently hold Walmart stock?
As reported, Walmart (WMT) is held by 20 billionaire investors, reflecting its strong appeal among some of the most influential market players.
What factors contribute to Walmart’s appeal as an FMCG stock for billionaire investors?
Walmart’s extensive retail network, robust omnichannel strategy, strong cash flow, and ongoing investments in technology and logistics make it a compelling choice for investors seeking stability and growth in the FMCG sector.
How does Walmart’s omnichannel strategy support its status as a top pick?
By continuously scaling its omnichannel fulfillment and third-party marketplace, Walmart is positioned to streamline operations, reduce margin pressures, and capture more significant market share, which reinforces its attractiveness to savvy investors.
What role do hedge fund holdings play in evaluating Walmart’s investment potential?
Hedge fund involvement is a secondary metric for ranking FMCG stocks. With 116 hedge fund holders, Walmart benefits from additional validation, as these investors are known for their rigorous market analysis and strategic selections.
How is Walmart addressing margin pressures in its business model?
Walmart is investing heavily in its e-commerce infrastructure and technology while improving logistics and last-mile delivery capabilities. These initiatives are expected to alleviate margin pressures and contribute to steady earnings growth.
What are Walmart’s growth prospects for 2025, according to industry analysts?
Analysts, including those at Goldman Sachs, project that Walmart will continue to drive strong earnings growth in 2025, leveraging its value proposition, market share gains, and strategic investments in technology and fulfillment.
Conclusion
Walmart (WMT) stands out as a compelling FMCG stock pick among billionaire investors thanks to its robust omnichannel strategy, strong cash flow, and continuous investments in e-commerce and technology. Backed by impressive hedge fund support and positive analyst ratings, Walmart is well-positioned to drive sustainable growth and capture market share in a competitive landscape. While some are exploring alternative investment opportunities, such as undervalued AI stocks, Walmart’s strategic initiatives, and broad market appeal ensure that it remains a top contender in the FMCG sector.