2 Stocks Down About 70% to Buy Now and Hold for the Next Decade

It's not always the best time to judge a consumer brand when its stock chart looks ugliest. Shoppers still grab their Quest bars and Jack Daniel's, unaware of the share price slump. That disconnect between what people buy and what investors see is often where patient investors can find their best entry points. That's the case with two consumer goods companies right now: a 155-year-old whiskey maker trading at a fraction of its 2020 peak and a protein snack company that has spent 2026 shrinking its share count while the market treated it like a melting ice cube.

1. Brown-Forman

Brown-Forman (NYSE: BFA) (NYSE: BFB) has fallen roughly 65% from the all-time high it set in November 2020, a drawdown that would be alarming if the company were losing its core franchise. It isn't. Jack Daniel's Tennessee Whiskey sales were flat in the quarter ended July 31, which sounds unremarkable until you consider that spirits consumption in developed markets has been shrinking for several years. Holding flat in a declining category means taking more of a share.

What gets less attention is what the Louisville company is doing around the edges of that core brand. Its ready-to-drink portfolio grew 20% last quarter, led by New Mix, a canned tequila cocktail that rose 48% on demand in Mexico and a fresh launch in the United States, according to industry news site 12x75. Jack Daniel's Tennessee Blackberry is in the middle of an international rollout. The company is often viewed as a one-brand story, and a new brand acts as a second leg to stand on, especially as drinking habits change.

The balance sheet shows a company behaving like it expects to be around for a long time. Brown-Forman repaid a $343 million euro-denominated note in July, then sold $500 million worth of five-year notes in September, with proceeds earmarked for dividends, buybacks, and pension funding. Free cash flow rose $32 million to $161 million in the latest quarter, and the dividend has been paid for 82 consecutive years and raised for 42 straight.

Some things to note, though. CEO Lawson Whiting announced in July that he will retire once a successor is named, so the next decade of strategy will be set by someone not yet chosen. Tequila sales dropped 12% last quarter, and the company still leans heavily on one brand. But a family-controlled drinking business that keeps raising its dividend through a category downturn tends to look obvious in hindsight. This stock has been in steady decline, but I think the bottom is near and now is a good time to start dollar-cost averaging.

2. Simply Good Foods

Simply Good Foods (NASDAQ: SMPL), the owner of Quest, Atkins, and OWYN, has lost around 70% from its 52-week high and now carries a market value below $1 billion. The reason is simple: Atkins is collapsing. Sales of that brand dropped 24.6% in the fiscal third quarter (ended May 30) as retailers pulled it from shelves, and the company has written down the value of Atkins and OWYN by $331 million so far this fiscal year.

So why hold it for 10 years? Because Atkins is no longer the business. Quest, the brand of protein chips and bars, generated $230 million of the company's $357 million in quarterly sales and is still growing. Protein has become the organizing idea of the modern snack aisle, and Quest built its following there before the trend went mainstream. Management is putting money behind that view: Simply Good Foods repurchased $213 million of its own stock in the first nine months of the fiscal year, more than a tenth of the company, funded partly by a $150 million loan. Net debt still sits at a modest 1.2 times adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

The bear case is that borrowing to buy back shares while sales fall is reckless rather than confident. Gross margins are down, OWYN has had product quality issues, per Food Dive, and CEO Joe Scalzo has been plain that the turnaround is not near its end. This is a riskier bet than Brown-Forman and should be sized that way.

What investors should do with these two

Neither stock is a quick fix. The appeal is that both companies are investing in their next decade while the market has been pushing them down and pricing them for their worst year. To me, that is the setup worth buying. Consider a measured position in Brown-Forman for the dividend and brand durability, and a smaller one in Simply Good Foods for the chance that Quest carries the company out of the Atkins hole. Give them a chance with 10 years, not 10 months.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool recommends Simply Good Foods. The Motley Fool has a disclosure policy.