Why Shares of Constellation Brands Inc. Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Constellation Brands were headed for the stars today, gaining as much as 12% and finishing up 10% on an impressive third-quarter earnings report.
So what: The distributor of alcohol brands including Negro Modelo and Svedka Vodka soared past estimates in its quarterly report this morning, posting earnings of $1.10 on expectations of $0.91, while revenue increased 88.2% to $1.44 billion, above the analysts' view at $1.39 billion. Constellation said nearly all of the increase came from its consolidation of Crown Imports that it achieved in a deal last June with Anheuser Busch-InBev. The company also raised its full-year EPS outlook to $3.10-$3.20, above expectations of $3.00.
Now what: The purchase of Grupo Modelo's distribution rights continues to pay dividends for Constellation, as the stock has now more than doubled in the past year. With a strong portfolio of brands, perpetual U.S distribution rights for Grupo Modelo products, and 21% top-line growth expected in fiscal 2015, the company should continue to see its shares move higher.
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The article Why Shares of Constellation Brands Inc. Popped originally appeared on Fool.com.Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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