Constellation Brands Inc (STZ-N)

It rallied 3% today, perhaps by a market sensing that Harris will win the election. STZ sells many beers that are popular with Latinos, and immigration will be more liberal under Harris. STZ's beers are made in Mexico, so it could be hit by a Trump tariff. 

He doesn't think a recession is around the corner, would pick names for continued mid-cycle economic growth. This name doesn't have as much growth as others, but earnings are reliable.

80% of revenue from Mexican beer imports like Corona and Modelo. Relative to industry, has done well. Wine and spirits side hasn't performed as well as management had wanted. Risky, expects it to underperform index. 

Stock has been sinking for months and faces concerns of the eight-loss drugs impacted their beer sales.

Last week, it reported stellar numbers but shares still fell, a victim to persistent misconceptions. Their Modelo is the #1 beer in the US and is gaining market share. Pacifico sales are up 21%. STZ operating margins were up 260 basis points. They beat Q1 EPS. Shares should be selling at $300. The problem is STZ also sells hard liquor, which Wall Street has given up on as well as doubts that beer's popularity is waning. Has huge free cash flow, are buying back shares, and is expanding facilities. Other threats are the weight-loss drugs and the popularity of cannabis. He won't abandon this stock though.

Leading wine, beer, and spirits. Safe choice. Favourable consumer trends, including moving towards premium offerings. Strong cashflow, will continue buybacks. 11% growth rate. Down 10% from recent highs, chance to buy. Yield is 1.6%, recently raised by 13%.

Was upgraded today. Likes it long term given its dividend growth. They did a great job in 2023 during the Bud Light debacle by growing market share, led by Modelo beer. is well-run.

They report Thursday. They sell the top-selling beer in the US, Modelo. Should report a good quarter. Beer sales have been strong and their flow is flow is good, but STZ needs to pay down debt.

The drug impacts hard liquor, not beer. Doesn't know why. He's watching this.

Spirits sales have been weak in the industry the past year, so he greeted STZ's earning today with worry. Beer sales did very well, but not wine and spirits. Still, STZ raised its full-year earnings and cash flow forecast. Shares were up 2% today after an early sell-off.

Unlike liquor sales, beer sales are healthy. STZ's Mexican beer sales are growing. Their most quarter boasted 12% net sales growth (i.e. Corona, Modelo).

Largest beer important company in USA. Shares up 30% in past 5 years. Lots of upside potential. Modest dividend yield. Management appear to be prioritizing revenue growth. Would prefer companies like Walmart. If heading into recession, would be good for defensive investors. 

So-called experts are now urging you to buy this stock, but STZ is already up 17% YTD, having been a huge beneficiary of the problems with Bud Light. Don't be a victim of these momentum chasers. In fact, take some profits now.

Don't average down. He has little faith in Canopy, but believes in Constellation who delivered a great quarter, but nobody cared. This will change.

He's long owned this, but the stock has hit several road blocks including a bad investment in cannabis-maker Canopy Growth and the company founders selling huge amounts of shares. he's stuck with it, because he believes in their Mexican beers like Modelo. They just reported solid numbers, like an earnings beat, and a sunny forecast about beer sales even wine/spirits isn't doing as well. Is a long way from last year's highs, but is undervalued.