Warren Buffett’s Berkshire Hathaway Sold more stock than he bought in 2024, so he probably raised some eyebrows when the company revealed his position to Constellation marks (NYSE: STZ).
However, this investment has lost the value of Berkshire, until the fears of fares and the fall of alcohol consumption have heavy in constellation actions. This might mean that Bershire must be inclined more In Buffett’s strategy and no less. Here is why.
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On the surface, the constellation looks like a buffett stock. Buffett likes “forever” stocks with the demand of the product that never ends. People have consumed alcohol from the beginning of time, so the selection of Constellation products would definitely be. Constellation also produces the U.S. # 1 beer, a special model, which means that he bought a market leader, a distinction of the most important investors are usually looking for.
In addition, Buffett has always been a value investor and the current state of constellation brands aims at a low assessment. In fact, some unique charges increased Ratio p/e to 47. Still, to a Ratio P/E Forward Of the 15, actions seem to trade with a significant discount.
In addition, its proportion of sales prices (p/s) of 3.4 shows that the metric reaches its lowest levels from the beginning of the pandemic. This proportion p/s dropped by 6 by 2022.
In addition, Buffett and his team probably saw an opportunity because of their abysmal performance. Constellation actions had generally monitored the S&P 500 Until he stopped rising in 2023 and decreased more recently.
One of the most recent worries is the fare concerns that trapped investors, including Buffett itself. The Constellation portfolio includes numerous imports, including several Mexican beers such as Model and Crown and spirits like noble Casa Tequila. Since these products will probably become more expensive, sales will fall and model could lose their position number 1.
However, the situation opens the possibility of a single investment opportunity: the possibility of “out-buffett” buffett.
One form is buying shares with a lower assessment. Ever since the buffett team bought shares in the fourth quarter, they bought a P/S ratio between 4 and 4.4. As mentioned above, the shares are available at the sales of 3.4 times, and since they can reduce more decisions, actions can be purchased with a lower assessment if the sale continues.
Secondly, new shareholders could get higher dividend performance. Currently, the annual payment of $ 4.08 per action produces about 2.2%, which is significantly higher than the approximate performance of dividends of 1.5% of the S&P 500.
In addition, it has increased its dividend annually since the payments began in April 2015. Although last year’s paid rise has only increased, the dividend has often increased in two -digit percentages. Also, the $ 1.9 billion of free constellational cash flow in the 2025 exercise (ended on February 28) far exceeded the cost of $ 732 million in the dividend, which means that more payments can probably afford.
Certainly, the purchases of the first quarter of Berkshire will not be known until it publishes their 13-F, and the buffett team may add actions to the previous or current barracks. However, if all purchases can be made at a lower price of the shares, it may be a time when investors can overcome buffett returns.
Despite Berkshire’s investment, constellation brands face the uncertainty in almost term in the middle of the increase in rates and the fall of consumption. Therefore, investors should not assume that the action has been dropped or used soon.
However, Berkshire’s investment team probably saw a chance since he started buying at a higher price than today. In fact, the low assessment, the prospects for increasing dividend yields and the history of at least coinciding with market performance can have an opportunity. With the possible possibility of gaining higher yields than Berkshire, investors have a greater incentive to start adding constellation actions.
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Will Hely It has positions in Berkshire Hathaway. The Motley Fool has positions and recommends Berkshire Hathaway. The Motley Fool recommends constellation brands. The mold’s fool has a Outreach policy.
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