Should I Buy Constellation Brands, Inc. (STZ)?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was Constellation Brands, Inc. (NYSE:STZ).

Constellation Brands, Inc. (NYSE:STZ) was in 53 hedge funds’ portfolios at the end of September. The all time high for this statistic is 71. STZ investors should pay attention to an increase in support from the world’s most elite money managers recently. There were 50 hedge funds in our database with STZ positions at the end of the second quarter. Our calculations also showed that STZ isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a gander at the key hedge fund action regarding Constellation Brands, Inc. (NYSE:STZ).

Jeffrey Gates of Gates Capital

Do Hedge Funds Think STZ Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards STZ over the last 25 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, Citadel Investment Group held the most valuable stake in Constellation Brands, Inc. (NYSE:STZ), which was worth $454.3 million at the end of the third quarter. On the second spot was D E Shaw which amassed $220.4 million worth of shares. Arrowstreet Capital, Gates Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kehrs Ridge Capital allocated the biggest weight to Constellation Brands, Inc. (NYSE:STZ), around 7.14% of its 13F portfolio. Franklin Street Capital is also relatively very bullish on the stock, designating 7.07 percent of its 13F equity portfolio to STZ.

As aggregate interest increased, key money managers have been driving this bullishness. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), assembled the biggest position in Constellation Brands, Inc. (NYSE:STZ). Schonfeld Strategic Advisors had $14.8 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also made a $8.7 million investment in the stock during the quarter. The following funds were also among the new STZ investors: Simon Sadler’s Segantii Capital, Brandon Haley’s Holocene Advisors, and Jinghua Yan’s TwinBeech Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Constellation Brands, Inc. (NYSE:STZ) but similarly valued. These stocks are Sempra (NYSE:SRE), Aptiv PLC (NYSE:APTV), Baxter International Inc. (NYSE:BAX), SYSCO Corporation (NYSE:SYY), STMicroelectronics N.V. (NYSE:STM), Cintas Corporation (NASDAQ:CTAS), and Marathon Petroleum Corp (NYSE:MPC). This group of stocks’ market values match STZ’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1614 million. That figure was $1719 million in STZ’s case. Aptiv PLC (NYSE:APTV) is the most popular stock in this table. On the other hand STMicroelectronics N.V. (NYSE:STM) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Constellation Brands, Inc. (NYSE:STZ) is more popular among hedge funds. Our overall hedge fund sentiment score for STZ is 80.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on STZ as the stock returned 7.3% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

Suggested Articles:

• 14 Largest Engineering Companies in the World
• 20 Largest Milk Producing Countries in 2021
• 15 Best Beaten Down Stocks To Buy Now

Disclosure: None. This article was originally published at Insider Monkey.