Constellation Brands, Inc. (STZ) Returns to Earth

For example, sales of flavored whiskies increased 155% in the first quarter of 2012, representing the nation’s fastest-growing spirits type. Quick to enter the increasingly popular market, Brown-Forman is already pinning whiskey makers in a half nelson. It holds a 70%-plus market share of flavored brown spirits in the U.S., with its Jack Daniel’s Tennessee Honey and Southern Comfort flavored whiskey brands. Meanwhile, Beam has rolled out its Reg Stag flavored whiskey, and Diageo has added a honey variation to its Bushmills brand. So far, Constellation claims its product launch of Black Velvet Toasted Caramel Whiskey has been well received.

That’s a good thing for Constellation. Especially considering it may need another hard liquor to drown its sorrows in now that the AB InBev deal might fall through.

Foolish bottom line
Constellation’s stock hit it out of the stratosphere last year. But was its meteoric rise just premature celebration? Potential deal creators and deal busters can generate huge stock price swings. Some investors see Constellation as a good value now that shares have sold off. But keep in mind all aspects of a company when in investing for the long haul, and don’t base your entire investing thesis on one potentially botched-up deal.

The article Constellation Brands Returns to Earth originally appeared on Fool.com and is written by Nicole Seghetti.

Fool contributor Nicole Seghetti has no position in any stocks mentioned. The Motley Fool recommends Beam, Diageo plc (ADR), and Molson Coors Brewing (NYSE:TAP) Company.

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