{"id":23330,"date":"2025-02-25T07:30:00","date_gmt":"2025-02-25T12:30:00","guid":{"rendered":""},"modified":"2025-02-25T12:26:52","modified_gmt":"2025-02-25T17:26:52","slug":"a-buying-opportunity-in-booze-related-stocks","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/a-buying-opportunity-in-booze-related-stocks\/","title":{"rendered":"A Buying Opportunity in Booze-Related Stocks"},"content":{"rendered":"\n<p>Reports of alcohol\u2019s death have been greatly exaggerated. And that has created <a>a buying opportunity in booze-related stocks<\/a>.<\/p>\n\n\n\n<p>The reports claim the younger generation isn\u2019t drinking so much. They\u2019re opting for a healthier lifestyle, or they\u2019re choosing from among the growing supply of alternative mind-numbing substances. So, investors are concerned about the future of the booze business.&nbsp; And they\u2019ve sold off the stocks to historically low fundamental values.<\/p>\n\n\n\n<p>What investors are forgetting, though, is the older generations are still boozing it up. And the alcohol companies have a remarkable ability to evolve, and to alter marketing strategies to ensure some level of growth.<\/p>\n\n\n\n<p>The bottom line is alcohol isn\u2019t going away. But alcohol stocks are priced as if it is.<\/p>\n\n\n\n<p>For example, shares of Anheuser-Busch InBev (BUD) were trading at $66 last October. They hit $46 in January. Constellation Brands (STZ) was trading above $250 per share five months ago. It traded as low as $150 earlier this month. And Molson Coors Beverage (TAP) traded above $63 in November, but dipped below $53 in January.<\/p>\n\n\n\n<p>At those discounted prices, alcohol stocks were as cheap as they\u2019ve been in at least a couple of years. And the valuations were near the lows of their historical ranges.<\/p>\n\n\n\n<p>Constellation Brands, for example, at $150 per share traded at just 11 times forward earnings. That\u2019s a 50% discount to its historical forward price\/earnings ratio. STZ traded for less than 3 times book value \u2013 where its normal book value multiple is closer to 5.<\/p>\n\n\n\n<p>That was enough to prompt Warren Buffett\u2019s Berkshire Hathaway to establish a beginning position in Constellation Brands. It was a relatively small purchase \u2013 just $1.2 billion worth.&nbsp; But it was Uncle Warren\u2019s first venture into the alcohol business. And the news of his purchase has helped STZ bounce to above $176 per share.&nbsp;<\/p>\n\n\n\n<p>It looks to me like booze stocks have bottomed, and we\u2019re in the early stages of an alcohol-related rally. If that\u2019s true, alcohol stocks could be sharply higher in the weeks and months ahead.<\/p>\n\n\n\n<p>Best regards &amp; good trading,<\/p>\n\n\n\n<p>Jeff Clark<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alcohol stocks could be sharply higher in the weeks and months ahead.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-23330","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=23330"}],"version-history":[{"count":2,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23330\/revisions"}],"predecessor-version":[{"id":23348,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23330\/revisions\/23348"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=23330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=23330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=23330"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=23330"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=23330"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=23330"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=23330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}