All right, we got about uh six minutes to go before we get an opening bell here on this Tuesday in August. Things are pretty busy for August, I got to say. You know, usually last week things are kind of slow.You and I are trying to figure out what we're going to talk about. We got no shortage and you want to do constellation brands now. >> Look, here's a stock that's been horrendous.I don't know if we have a charter con. >> Oh, look at that. It's been terrible right here.And I'm not saying they're wrong. Ba ...

Core Viewpoint - Constellation Brands is highlighted as a significant investment opportunity within Berkshire Hathaway's high-yield dividend holdings, despite challenges in the alcohol market and a lower-than-average dividend yield [1][2]. Group 1: Berkshire Hathaway's High-Yield Dividend Stocks - Berkshire Hathaway has invested in dividend stocks, with the average yield in the current market at 1.2% [1]. - Eight stocks in Berkshire's portfolio offer high yields, with Constellation Brands being the top pick due to aggressive recent purchases [2]. - Other high-yield stocks in the portfolio, such as Kraft Heinz and SiriusXM, face significant challenges, making them less attractive compared to Constellation [6][8]. Group 2: Constellation Brands' Position and Challenges - Constellation Brands primarily generates revenue from beer, holding U.S. distribution rights for popular brands like Modelo and Corona, but faces potential tariff issues [9]. - The company has an annual dividend of $4.08 per share, yielding just under 2.5%, which is lower than some other Berkshire investments [10]. - Despite challenges, Constellation is viewed as a turnaround story with a path to success, as alcohol consumption remains a long-standing human behavior [11]. Group 3: Growth Potential and Valuation - Constellation has opportunities for revenue growth by leveraging its beer success in the wine and spirits segments [12]. - The company has a trailing P/E ratio of 47, but a forward P/E ratio of 13 suggests a more favorable valuation, indicating potential for stock price appreciation [13][16]. - Berkshire's significant share purchases, totaling over 13 million shares in recent quarters, suggest confidence in Constellation's overlooked growth potential [14].

Group 1: Market Trends - The consumer staples sector has seen a rotation into defensive sectors, with consumer staples (0.71%), real estate (1.16%), and healthcare (3.16%) leading the market in the past week [1] - Inflows into defensive sectors may indicate the strength of the current market rally, suggesting it spans all sectors [2] Group 2: Constellation Brands Overview - Constellation Brands, a global alcoholic beverage producer, has seen significant investment from Berkshire Hathaway, which increased its stake to 13.4 million shares valued at $2.210 billion [3][7] - The global alcoholic beverage industry was valued at $1.762 billion in 2024 and is projected to reach $3.015 trillion by 2030, with a CAGR of 9.7% [5] Group 3: Financial Performance - Constellation Brands reported a consolidated net income of $523.8 million for FY 2026 Q1, a significant improvement from a loss of $370.6 million in Q4 2025 [11] - The company's free cash flow increased from $879.7 million in FY 2018 to $1.973 billion in FY 2025, representing a growth of 124.28% [11] Group 4: Stock Performance and Valuation - Constellation Brands' stock is currently trading at a forward P/E multiple of 13.00, indicating it is undervalued [12] - The stock has potential upside of 18.29% in the near term, with a 12-month price target of $213.74, nearly 30% higher than its current trading price [15]

Core Viewpoint - Berkshire Hathaway disclosed its Q2 holdings report, revealing a reduction in Apple and Bank of America shares, while also unveiling new investments in healthcare, steel, and real estate sectors [2][5]. Group 1: New Investments - Berkshire initiated positions in six new stocks during Q2, including UnitedHealth (UNH), Nucor Steel (NUE), Lennar (LEN), D.R. Horton (DHI), Lamar Advertising (LAMR), and Allegion (ALLE) [2][6]. - The total market value of these new positions at the end of Q2 was approximately $3.65 billion [6]. Group 2: Reduction in Holdings - In Q2, Berkshire reduced its stake in Apple by 20 million shares, a decrease of about 6.67%, while still maintaining it as the largest holding [9]. - Additionally, Berkshire sold over 26.3 million shares of Bank of America, representing a reduction of approximately 4.17% [9]. Group 3: Market Reaction - Following the announcement of new positions, stocks like UnitedHealth and Nucor Steel saw significant after-hours gains, with increases exceeding 8% [3]. Group 4: Investment Strategy - The new investments are viewed as defensive positions with potential for valuation recovery, aligning with Buffett's investment philosophy of seeking companies with a "moat" [7].

Core Insights - Constellation Brands, Inc. will participate in the 2025 Barclays Global Consumer Staples Conference, discussing financial metrics, operating performance, strategic initiatives, and future outlook [1] Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3] - The company aims to build beloved brands and is recognized as one of the fastest-growing large consumer packaged goods (CPG) companies in the U.S. retail sector [3] Product Portfolio - The company's product offerings include high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits including Casa Noble Tequila and High West Whiskey [4] Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating an Environmental, Social, and Governance (ESG) strategy into its business model [5] - The company focuses on environmental stewardship, community investment, and promoting responsible alcohol consumption as part of its long-term business strategy [5]

Core Insights - Constellation Brands, Inc. will participate in the 2025 Barclays Global Consumer Staples Conference on September 2, 2025, where executives will discuss financial metrics, operating performance, strategic initiatives, and future outlook [1] Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3] - The company's mission focuses on building beloved brands and enhancing human connections, which drives its growth as one of the fastest-growing large consumer packaged goods companies in the U.S. [3] Product Portfolio - The company offers a diverse range of products, including high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits like Casa Noble Tequila and High West Whiskey [4] Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating its Environmental, Social, and Governance (ESG) strategy into its business practices [5] - The company aims to be a good steward of the environment, invest in communities, and promote responsible beverage alcohol consumption, aligning these goals with its long-term business strategy [5]

Group 1 - Warren Buffett's Berkshire Hathaway reported a significant asset write-down of $3.8 billion on its investment in Kraft Heinz, reducing its book value to $8.4 billion from over $17 billion at the end of 2017 [4] - Despite the apparent loss, an analysis revealed that Buffett had secured nearly 60% profit due to favorable terms negotiated during the transaction, showcasing his ability to turn a perceived failure into a profitable outcome [4][5] - Buffett's investment philosophy emphasizes long-term value and strategic positioning, which has allowed him to navigate market fluctuations effectively [5] Group 2 - Buffett's cautious outlook on the current U.S. stock market is evident, as he believes the S&P 500's price-to-earnings ratio exceeding 30 indicates inflated growth expectations, suggesting potential historical investment opportunities in the next five years [16] - Berkshire Hathaway's cash reserves reached a record high of $344 billion, providing a robust buffer against market volatility as Buffett prepares to pass the reins to his successor, Greg Abel [21] - The company holds a diversified portfolio, with significant investments in Apple, American Express, and Coca-Cola, which together account for over 50% of its stock investment portfolio [18][19] Group 3 - Buffett's investment strategy includes a focus on companies with strong fundamentals, as evidenced by his long-term holdings in Coca-Cola and Apple, which have shown resilience and growth despite market challenges [27][29] - The investment approach is characterized by a preference for businesses with a competitive edge and sustainable cash flow, avoiding speculative trends such as AI investments that do not align with his expertise [20][32] - Buffett's principles emphasize the importance of understanding the intrinsic value of investments, advocating for a long-term perspective rather than short-term speculation [28][30] Group 4 - Buffett's philanthropic efforts include significant donations to charitable causes, particularly the Gates Foundation, reflecting his belief in responsible wealth distribution and opposition to hereditary wealth [36] - His lifestyle remains modest despite immense wealth, highlighting a commitment to simplicity and frugality, which has become a notable aspect of his public persona [36]

Core Viewpoint - Constellation Brands reported disappointing Q1 fiscal 2026 results, with both sales and earnings missing estimates, primarily due to weak consumer demand influenced by socioeconomic factors [3][4]. Financial Performance - Comparable earnings per share (EPS) for Q1 were $3.22, down 10% year over year, missing the Zacks Consensus Estimate of $3.38. Reported EPS was $2.90, a 39% decline year over year [4]. - Net sales fell 5.5% year over year to $2.52 billion, also missing the Zacks Consensus Estimate of $2.57 billion [4]. - The beer segment's sales decreased 2% year over year to $2.23 billion, with a shipment volume decline of 3.3% [5]. - The wine and spirits segment saw a significant sales drop of 28% year over year to $280.5 million, driven by a 30.4% decline in shipment volumes [6]. Margin Analysis - Comparable operating income was $810 million, down 11% from the prior year, attributed to declines in both beer and wine & spirits segments [7]. - Operating income for the beer segment fell 5% year over year to $873.4 million, with an operating margin contraction of 150 basis points to 39.1% due to increased costs [8]. - The wine and spirits segment reported an operating loss of $6 million, a significant decline from an operating income of $59.7 million in the previous year [9]. Financial Position - As of May 31, 2025, cash and cash equivalents were $73.9 million, long-term debt was $9.8 billion, and total shareholders' equity was $7.3 billion [10]. - The company generated an operating cash flow of $637.2 million and an adjusted free cash flow of $444.4 million for Q1 [10][11]. Future Outlook - Constellation Brands forecasts operating cash flow of $2.7-$2.8 billion and free cash flow of $1.5-$1.6 billion for fiscal 2026, with planned capital expenditures of $1.2 billion [12]. - The company anticipates organic net sales for fiscal 2026 to range from a decline of 2% to an increase of 1%, with the beer segment expected to grow 0-3% and the wine and spirits segment to decline 17-20% [13]. - Comparable EPS guidance for fiscal 2026 is set at $12.60-$12.90, with reported EPS expected to be $12.07-$12.37 [15].

Group 1 - The S&P 500 index is reaching record highs, indicating strong market performance, but there is a caution that significant optimism is already reflected in the index [2] - A limited number of stocks, such as NVIDIA, are driving the index's performance, suggesting a concentration of gains among a few companies [2] Group 2 - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1]

Group 1 - Constellation Brands (STZ) is a leading alcoholic beverage producer known for high-quality brands, particularly Corona, which is often rated as the most valuable beer brand [1] - The company has a diverse portfolio that includes various commodities and sectors, showcasing its extensive research experience in industries such as metals, mining, consumer discretionary, REITs, and utilities [1] Group 2 - The analyst has over 10 years of experience researching companies, estimating in-depth research on over 1000 companies across multiple sectors [1]