The merger between Anheuser Busch Inbev SA (ADR) (NYSE:BUD) and SAB Miller has been the main event in the beverage sector, with the deal expected to be completed in the second half of the year. Since the deal has posed some regulatory difficulties, the two major producers were forced to dispose of some of the assets, which were promptly picked up by their competitors. Let’s take a look at some of these moves and the way hedge funds have positioned themselves in the sector.
An everyday investor doesn’t have the same resources and capabilities to analyze different publicly-traded companies as hedge funds do. This is why it is a good idea to see what stocks hedge funds like the most and try to imitate some of their bullish moves in an attempt to reap market-beating returns. At Insider Monkey, we follow the activity of several hundred of the best-performing hedge funds as part of our strategy. We analyze their 13F filings and use the data to see what stocks they are collectively bullish on. Through extensive research, we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas (see more details here).
During the fourth quarter of 2015, hedge fund sentiment towards Constellation Brands, Inc. (NYSE:STZ) has slightly improved, as the number of funds tracked by Insider Monkey with long positions increased to 67 from 64 at the end of the third quarter. Together, these funds control approximately 19% of the company’s common stock as of the end of December. Stephen Mandel of Lone Pine Capital is among those that sought to buy the stock during the quarter, having increased his stake by 15%. In its latest 13F filing, Lone Pine indicated ownership of 5.35 million shares worth $762 million. Although Constellation Brands, Inc. (NYSE:STZ)’s main assets are considered its beer brands, the company’s wine business has made a surprising comeback in the last quarter. Wine sales increased by $25 million and operating margins increased to 27.5% for the period. The beer business is also hot, with several breweries expecting a steep increase in output as Constellation Brands, Inc. (NYSE:STZ) is struggling to meet the consumer demand.