Portfolio Manager Guy Judkowski of Waterloo International Advisors says Constellation Brands, Inc. (NYSE:STZ) has a resilient business and regularly exceeds analyst estimates, which is why Waterloo added it to the growth side of its portfolio.
“What we do on the growth side of the portfolio is we look for companies that are large cap, that have sustainable business models where the macro is in its favor. So we are trying to identify certain trends in industries that we think have favorable wind at the back, and we think that an example of this in the portfolio would be Constellation Brands, a leading international producer and marketer of beverage alcohol brands.
One thing that we like in terms of the macro is that in an economic environment that is somewhat slow, Constellation’s business is relatively resilient. We also like the fact that it has 12% of the U.S. market and nearly 2% of the global market. So it’s a large player that should continue to benefit from consolidation and from economies of scale.
Judkowski says his firm aims for companies that rank highly in its quantitative screening process, and it selects companies that rank highest in the sectors that have the most favorable fundamental factors at play.
In terms of Constellation, they have a five-year annual EPS growth rate of 25%, and they’ve been consistently exceeding analyst estimates. So here you have a company that has a reasonable valuation, strong fundamentals as evidenced by solid earnings per share outperformance over a sustained time period, as well as a favorable economic backdrop. So that is a core holding in the portfolio.
International Business Machines Corp. (NYSE:IBM) Consistently Returns Money to Shareholders
March 04, 2016
SYSCO Corporation (NYSE:SYY) Consistently Grows 5% Per Year
February 02, 2017
Liberty Global Plc (LBTYA) Consistently Buys Back Shares, Looks to Grow Free Cash Flow Per Share at Mid-Teens Rate
August 30, 2013
