Ambev S.A. has caught the attention of bulls with its undervalued stock trading at a 23% discount to fair value, potentially offering 9% annual alpha if the gap closes in three years. The company’s growth in local currency hasn’t translated to USD, but factors like easing input costs and brand premiumization are boosting margins and profitability.

Despite trading at a discount to historical averages, Ambev’s stock could re-rate with margin normalization, though risks include cost inflation, FX headwinds, and competitive pressures. While the company’s fundamentals are strong, caution remains due to persistent FX risk. Molson Coors Beverage Company’s bullish thesis still stands, but Ambev is favored for its emerging market growth and premiumization.

Ambev S.A. is not among the 30 Most Popular Stocks Among Hedge Funds, with 23 hedge fund portfolios holding ABEV in the second quarter. While ABEV shows investment potential, CompoundingLab suggests AI stocks with greater upside and less downside risk. For an undervalued AI stock benefiting from tariffs and onshoring, check out their free report on the best short-term AI stock.

Read more at Yahoo Finance: Ambev S.A. (ABEV): A Bull Case Theory