We recently compiled a list of the 10 Best Liquor Stocks To Buy According to Short Sellers. In this article, we are going to take a look at where Constellation Brands, Inc. (NYSE:STZ) stands against the other liquor stocks.
Short selling is a strategy where traders profit from the decline in the price of a stock or other securities. It is when traders can borrow shares and sell them, hoping to purchase them back when they are cheaper. The strategy allows traders to capitalize on stocks or markets they feel are overvalued, giving them more opportunities to make a profit.
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Short sellers in America had a tough year in 2024, as the broader US market posted gains of over 23%, building on a gain of over 24% from 2023. The two-year uptick of 53% is the highest since the almost 66% rally in 1997 and 1998. As a result, short sellers were down $180.9 billion in last year’s mark-to-market losses, representing a decrease of approx. 15% on an average short interest of $1.2 trillion. The sectors where shorts performed the worst are, unsurprisingly, Information Technology and Communication Services, as tech stocks surged the most last year. However, the European market has recently been a popular playground for short sellers amid the region’s sluggish economic and earnings growth and political instability in France and Germany.
The alcohol sector also seems like an attractive option for short selling, especially after the recent advisory by the US Surgeon General Vivek Murthy that consuming alcohol increases the risk of at least seven types of cancer, including breast, colon, and liver cancer. The report claims that alcohol consumption in the US is directly linked to approximately 100,000 cancer cases and 20,000 deaths annually. As such, Mr. Murthy has proposed to put cancer warning labels on alcoholic beverages, signaling a shift toward more aggressive tobacco-style regulation for the sector if adopted. The Surgeon General also called to reassess the guidelines on alcohol consumption limits, so consumers can weigh the risks more accurately.
The advisory also managed to impact the financial market, sending down the stocks of several major alcohol players in the country, in some cases by over 3%. This comes at a time when the alcohol sector is already facing some major headwinds, including a downturn in sales following the pandemic boom, threats of looming tariffs, competition from alternative beverages, and the rapidly rising trend of abstinence. More and more Americans, especially the younger generations, are becoming increasingly conscious about health and wellness and saying ‘no’ to alcohol. According to the National Institute on Alcohol Abuse and Alcoholism, America’s per capita annual consumption of alcohol in 2022 was 2.5 gallons, down from 3.28 gallons in the early 1980s.
However, this shift has marked a new opportunity for the alcohol industry, which has responded by flooding the market with a wide range of low- and no-alcohol beverages. The strategy seems to be paying off, as according to Nielsen, non-alcoholic beer, wine, and spirits collectively surpassed $565 million in sales in 2023, up 35% from the year before.
There are also doubts over how effective putting warning labels on alcoholic beverages will be since ingrained habits are hard to change and similar labels have done little to curb smoking. Some experts remain optimistic. Paul Gilbert, an associate professor at the University of Iowa College of Public Health, believes that it is unlikely that people will immediately change their drinking habits following the Surgeon General’s report, but it could eventually lead to changes in how people perceive their risk.
Methodology:
To collect data for this article, we looked up the 20 Largest Publicly Traded Liquor Companies in the US and then picked out the ones with the lowest short percentage. The stocks are sorted in descending order of their short interest, as of December 13, 2024.
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A winemaker examining a glass of red wine from a barrel in a cellar.
Constellation Brands, Inc. (NYSE:STZ)
Short % of Shares Outstanding: 1.58%
Constellation Brands, Inc. (NYSE:STZ) is engaged in the production, import, marketing, and sale of some of the world’s most iconic beer, wine and spirits brands. Based in New York, the company has operations in the US, Mexico, New Zealand, and Italy.
Constellation Brands, Inc. (NYSE:STZ) has remained in the headlines in the American alcohol sector after its popular Modelo Especial brand became the Best-Selling Beer in America following the controversy with Bud Light in 2023. Since then, the sales gap between the two brands has only widened further and Constellation’s beer business has continued to flourish. In Q2 of 2025, the company’s beer segment (responsible for raking in the majority of its revenue) continued to deliver strong financial performance with net sales and operating income growth of nearly 6% and 13%, respectively. Its core brands continued their uptick during the quarter as Modelo Especial grew by 11%, while Pacifico surged by 21%.
A major factor benefiting Constellation Brands, Inc. (NYSE:STZ) is the rapidly growing popularity of Mexican beers in the US. Data from the Beer Institute revealed that beer imported from Mexico made up about 81% of the total imported beer volume to the US in 2023, up from 61% ten years ago. What’s more is that this growth is not attributed to America’s Hispanic population alone. According to Bernot, more non-Hispanic American households (61%) purchased Modelo than Hispanic households (39%) last year. However, the growing Hispanic demographic certainly helps and America’s Hispanic population (a segment that makes up over 50% of the company’s client mix) is growing almost twice as fast as its general population, so brands like Modelo, Pacifico, and Corona are expected to stay in high demand. Moreover, Constellation’s relationship with Reyes Beverage Group, the largest beer distributor in America, is also a major contributing factor to its success.
However, Constellation Brands, Inc. (NYSE:STZ) could be among the companies that stand to lose when Donald Trump takes office this month. The President-elect has stated that he intends to slap 25% tariffs on imports from Mexico, and Constellation’s high reliance on Mexican beer imports could become a serious problem. Hence, the company is making sure it has adequate inventory in place here before Trump reassumes power. It is also assessing cutting costs elsewhere to absorb the rumored tariffs, or incrementally raising its prices, but that will carry its risks.
With 36 elite money managers tracked by IM holding a stake in the company at the end of Q3 2024, Constellation Brands, Inc. (NYSE:STZ) is the Best Beer Stock to Buy Now According to Hedge Funds.
Overall STZ ranks 5th on our list of the best alcohol stocks according to short sellers. While we acknowledge the potential for STZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than STZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.