This is a step-by-step stock review to answer the question, is Constellation Brands (STZ) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Constellation Brands (STZ) stock a good buy?
- Constellation Brands Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Constellation Brands (STZ) stock a good buy?
1. Constellation Brands Company History
- Founded in 1945: Constellation Brands was established in New York by Marvin Sands as a small wine distribution company.
- Early Growth: The company initially focused on distributing wine, gradually expanding its portfolio and geographic reach.
- Public Listing: Constellation Brands went public on the New York Stock Exchange in 1973, accelerating its growth and market presence.
- Major Acquisitions: In the 2000s, the company acquired several prominent brands, including Robert Mondavi, and later, brands like Corona and Modelo, strengthening its position in the beverage industry.
- Expansion into Beer: The acquisition of Grupo Modelo’s U.S. beer business in 2013 marked a significant expansion into the beer market, diversifying its product range.
- Global Reach: Constellation Brands has established a strong international presence, distributing its products across numerous countries.
- Recent Focus: The company continues to innovate and expand, focusing on premium alcoholic beverages and exploring new growth opportunities in the global market.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 50
- MOS: 23%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Constellation Brands makes money:
- Beer Sales: Constellation Brands earns money by selling popular beer brands like Corona, Modelo, and Pacifico.
- Wine Sales: The company profits from its extensive wine portfolio, including brands like Robert Mondavi and Meiomi.
- Spirits Sales: It generates revenue from premium spirits and liquors, including brands like Svedka Vodka and Casa Noble Tequila.
- Global Distribution: Constellation Brands makes money through its international distribution network, reaching customers worldwide.
- Premium Pricing: The company benefits from selling high-quality, premium beverages at higher prices.
- Innovative Products: Revenue is boosted by launching new and trendy products that attract consumers and meet market demands.
- Robert Mondavi Winery
- Grupo Modelo’s U.S. Beer Business
- Corona
- Modelo
- Pacifico
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Constellation Brands stacks up against other companies.
- Diageo plc.(DEO) – 83
- Brown-Forman Corporation.(BF-B) – 50
- Constellation Brands, Inc.(STZ) – 50
- Brown-Forman Corporation.(BF-A) – 45
- The Duckhorn Portfolio, Inc.(NAPA) – 33
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- CEO Appointment: Bill Newlands became CEO of Constellation Brands in March 2019, leading the company through a significant period of growth and transformation.
- Acquisition of BALLAST POINT: Under his leadership, Constellation Brands sold Ballast Point Brewing Company, focusing on its core beer brands and streamlining operations.
- Expansion of Premium Brands: Newlands spearheaded the expansion of premium brands, including high-profile acquisitions such as the purchase of the remaining stake in the Grupo Modelo’s U.S. beer business.
- Sustainability Initiatives: He prioritized sustainability, implementing initiatives to reduce the company’s environmental footprint and promote responsible sourcing.
- Digital and E-commerce Growth: Newlands enhanced the company’s digital and e-commerce capabilities, boosting online sales and digital marketing efforts.
- Financial Performance: Under his leadership, Constellation Brands consistently delivered strong financial performance, including revenue growth and increased profitability.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Constellation Brands (STZ) is 64/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Constellation Brands (STZ) stock a good buy?
Some of the top questions investors can have is Constellation Brands (STZ) stock a good buy or should I buy Constellation Brands (STZ) stock?
Investing in Constellation Brands (STZ) presents a strong case for consideration, with several key factors contributing to its appeal. The company is a leading player in the beverage industry, known for its high-profile brands like Corona, Modelo, and Svedka Vodka. Constellation’s strategic acquisitions, such as those of Grupo Modelo’s U.S. beer business and the French’s mustard brand, have bolstered its market position and diversified its product offerings.
Additionally, Constellation Brands has a solid track record of revenue growth and profitability, supported by its focus on premium and high-growth beverage segments. The company’s commitment to innovation and sustainability further enhances its investment attractiveness.
However, potential investors should also be aware of risks such as fluctuating commodity prices and market competition. Overall, Constellation Brands offers a compelling investment opportunity for those seeking stability and growth in the consumer goods sector, though attention to industry and economic conditions is advised.
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To truly know if Constellation Brands is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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