Aristotle Capital Value Equity Strategy Sold Constellation Brands (STZ) Despite Steady Business Rationale

Core Insights - The U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index increasing by 2.66% and the Bloomberg U.S. Aggregate Bond Index rising by 1.10% [1] - Value stocks outperformed growth stocks during this period, and the U.S. economy demonstrated resilience [1] - Artificial intelligence emerged as a significant theme, with over 300 S&P 500 companies mentioning "AI" in earnings calls, positively impacting mega-cap tech stocks [1] - Concerns were raised regarding AI revenue circularity, capital spending, and long-term investment returns [1] - The Composite returned 1.45% pure gross of fees (0.95% net of fees), underperforming the Russell 1000 Value Index's 3.8% gain and the S&P 500 Index's 2.66% gain [1] Company Analysis: Constellation Brands, Inc. (NYSE:STZ) - Constellation Brands, Inc. is a leading U.S.-based manufacturer of beer, wine, and spirits, with a market capitalization of $27.963 billion [2] - The stock closed at $160.62 per share on February 3, 2026, delivering a 14.33% return in the past month, but down 7.08% over the past twelve months [2] - The company was first invested in during Q4 2021, benefiting from its dominant share in the fast-growing Mexican imports segment of U.S. beer, supported by brands like Modelo, Corona, and Pacifico [3] - Despite the long-term strategic rationale remaining intact, the expansion of shelf space and distribution progressed more slowly than expected, and challenges in the Wine & Spirits segment delayed margin recovery [3] - As a result, the company was identified as the most appropriate candidate for sale to fund a new investment in Q1 2026 [3]