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

Brown-Forman is down roughly 65% from its November 2020 peak, but Jack Daniel’s sales were flat in the latest quarter, ready-to-drink sales grew 20%, and free cash flow rose $32 million to $161 million; its dividend has increased for 42 consecutive years. Simply Good Foods has fallen about 70% from its 52-week high as Atkins sales dropped 24.6% and the company recorded $331 million in brand write-downs, while Quest generated $230 million of $357 million in quarterly sales. The article presents both as long-term, higher-risk investment opportunities, while noting Brown-Forman’s CEO succession and Simply Good Foods’ falling sales, margin pressure, and debt-funded buybacks.

Analysis

The key distinction is whether these drawdowns reflect temporary sentiment or a permanently weaker earnings base. For Brown-Forman (BF.A), flat Jack Daniel’s sales amid category contraction could indicate relative resilience, but verify category and market-share data: flat sales alone do not prove share gains. RTD expansion offers a route to reach changing consumers, while leadership succession and tequila weakness leave execution risk. The near-term setup is less about the dividend record than whether organic growth and free cash flow can support capital returns without relying on incremental borrowing.

SMPL is a more asymmetric turnaround, not simply a cheaper consumer staple. Quest growth may not offset Atkins shelf losses if retailer resets persist; OWYN quality issues add a separate risk to distribution and brand trust. Debt-funded repurchases amplify both outcomes: they support per-share results if Quest sustains growth, but reduce flexibility if sales and gross margins continue to weaken. The largest missing inputs are current brand-level trends, retailer distribution, gross-margin trajectory, and post-buyback leverage.

Days: a weak consumer read-through could pressure both without changing the long-term thesis. Over 1–3 months, earnings and retail-distribution updates matter more than the article’s decade-long framing. Over 6–18 months, BF.A depends on succession and portfolio execution; SMPL needs evidence that Quest growth and margin recovery can outrun legacy-brand erosion. Contrarian risk: the market may be discounting structural category and shelf-space losses rather than a temporary trough. Do not assume either stock is near a bottom.

Key Decisions for Investors

• BF.A: consider a staged, modest long position rather than buying the full allocation at once. Add only if subsequent reports show resilient core-brand sell-through, positive contribution from RTDs, and free cash flow covering dividends and buybacks. Reassess if core volumes weaken materially or the successor signals a strategy that jeopardizes cash returns.
• SMPL: keep on a watchlist or use only a smaller, explicitly higher-risk starter position; avoid treating repurchases as proof of intrinsic value. Require stabilization in Quest growth, gross margin, and retailer distribution, plus no deterioration in leverage, before adding. Continued Atkins shelf losses or further quality problems would falsify the recovery case.
• Do not pair the two as equivalent defensive consumer exposures: BF.A is the comparatively steadier cash-return thesis, while SMPL is a concentrated brand-recovery bet. Before sizing either, verify current valuation, brand-level sell-through, and forward cash-flow coverage; the article does not establish these.