Constellation Story

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While some baby boomers are getting worried about consumer defensive space, it is reasonable to break down Constellation Brands against economic and market trends. As expected, Constellation Brands is starting to reaffirm its true potential as investors are becoming more and more confident in the future outlook. The returns on investing in Constellation Brands and the market returns of the last few months appear uncorrelated. Strong basic indicators of the company may also suggest signals of long term gains for Constellation investors. Constellation Brands is scheduled to announce its earnings today. The next earnings report is expected on the 13th of January 2021.
Published over three weeks ago
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Is Constellation (NYSE:STZ) outlook still optimistic?
The company's average rating is Buy from 12 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Constellation Brands market sentiment investors' perception of the future value of Constellation. Let us look at a few aspects of Constellation technical analysis.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of Constellation Brands. In general, we focus on analyzing Constellation Brands stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Constellation Brands's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Constellation Brands's intrinsic value. In addition to deriving basic predictive indicators for Constellation Brands, we also check how macroeconomic factors affect Constellation Brands price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.

How important is Constellation Brands's Liquidity

Constellation Brands financial leverage refers to using borrowed capital as a funding source to finance Constellation Brands ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Constellation Brands financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Constellation Brands's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Constellation Brands, but it might be worth checking our own buy vs. sell analysis

Exercise or conversion by Madero Garza Jose Manuel of 416 shares of Constellation Brands subject to Rule 16b-3

Legal trades by Constellation Brands insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Constellation insider trading alert for exercise of restricted stock units by Madero Garza Jose Manuel, the corporate stakeholder, on 28th of September 2020. This event was filed by Constellation Brands Inc with SEC on 2020-09-28. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Closer look at Constellation Brands Variance

Constellation Brands has current Variance of 2.54. Variance is another measure of security risk that shows the amount of dispersion of equity returns around their mean value. Variance is calculated as the average squared deviations from the mean. Evaluating a set of investment alternatives one can use variance to help determine the volatility when purchasing a specific security. Similar to Standard Deviation, the variance is a measure of how far a set of numbers is spread out around its mean.

Variance is also a measure of stock volatility and can help determine the risk an investor might take on when purchasing a specific security. A relatively big variance indicates that the daily prices or returns are far from the mean and a small variance indicates that they are located around the mean.

Variance 
 = 
SUM(RET DEV)2 
 = 
2.54
SUM = Summation notation
RET DEV = Actual returns deviation over selected period
N = Number of points for the period
Let's now compare Constellation Brands Variance to its closest peers:
STZ
CCE
PEP
TAP
STZ2.54
CCE629,406
PEP1.07
TAP3.32

Over 3 percent rise for Constellation Brands. What does it mean for investors?

Semi variance is down to 1.85. It may suggest a possible volatility slide. Constellation Brands has relatively low volatility with skewness of 0.77 and kurtosis of 2.34. However, we advise all investors to independently investigate Constellation Brands to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

The Current Takeaway on Constellation Brands Investment

When is the right time to buy or sell Constellation Brands? Buying stocks such as Constellation Brands isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. To summarize, as of the 1st of October 2020, we believe that Constellation Brands is currently undervalued with below average odds of financial distress in the next two years. Our primary 30 days 'Buy-Sell' recommendation on the company is Strong Buy.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Constellation Brands. Please refer to our Terms of Use for any information regarding our disclosure principles.

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