Parents and other adults are frequently faced with media reports of the common and growing binge drinking habits of America's young adults. While it is certainly not a healthy pursuit, it's probably safe to say it's not going away, either. As an investor, you can capitalize on the popularity of beer and liquor, energy drinks as "mixers," and even cigarettes, as drinking and smoking sometimes go hand-in-hand. The following sin stocks may be positively affected by the trend:
Molson Coors (NYSE:TAP) is probably the best-positioned beer company for the younger, heavier-drinking demographic. Its flagship Coors Light is a go-to beer for the drinker who wants to drink something a bit above the bottom of the barrel (and according to CNBC, it's the 4th best-selling beer in America). But for the penny-pincher, they also make Keystone Light (and regular and Ice), a cheaper beer, as well as Coors Extra Gold, which is sometimes seen as the preferred beer of older men who still want to drink like they're 21. Another important beer in the portfolio is Blue Moon, America's favorite faux-craft beer. Of course, many other types of beer from Anheuser-Busch Inbev (NYSE:BUD), Boston Beer Co. (NYSE:SAM) and other companies are also very popular. Craft beers are increasing in prevalence, but probably won't put a serious dent in consumers conscious of the alcohol-per-dollar ratio of their suds.
Diageo (NYSE:DEO) is the king of liquor, and college drinkers certainly like to drink that too. Diageo owns popular brands like Smirnoff, including malt beverage Smirnoff Ice, Captain Morgan, and Jose Cuervo, which are all flagships of the affordable-yet-kind-of-classy segment of liquor stores. Again, most young drinkers prefer to upgrade to products of this caliber. Smirnoff is the 2nd best selling brand in North Carolina's "Triangle," where many college students and young professionals live.
Monster Beverage Corporation (NASDAQ:MNST) even changed its name from Hansen Natural (HANS) to be more closely associated with its primary product, Monster energy drink. While the energy drink category is expanding, younger consumers are still definitely the target market, and Monster is a preferred brand. (The share statistics in the previous source are not current; Monster now commands a much greater share of the category.) Monster energy drinks are packed with caffeine and vitamins, and they fuel both late-night benders (normally they are mixed with vodka) and help students survive class the following morning. At this point, Monster is the best-positioned product in the category; it's more affordable than Red Bull, but is still respectable and reliably tasty; many cheaper energy drinks taste a lot worse.
Lastly, and somewhat unfortunately, smoking can be popular among college-age adults, especially in the context of drinking or going out. Altria (NYSE:MO) makes many of the popular cigarette brands, including Marlboro Reds, Ultra Lights, and the back-in-style Parliaments. Cigarettes are not popular everywhere, and the consumption of them is generally frowned upon on many campuses, but when people are smoking, they'll be smoking Altria cigarettes.
Not all of these stocks may be great buys at this point in time; Monster in particular is richly valued, though the same could have been said when shares were 50% lower a year ago. Also, all of these companies are massive national and global enterprises, so the behavior of American college students may not make a huge difference in the overall numbers. However, this list can be a great starting point for your own research.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.