Five Consumer Non-Durables Stocks That Hedge Funds Love

#3 Constellation Brands, Inc. (NYSE:STZ)

– Hedge Funds with Long Positions (as of September 30): 64

– Aggregate Value of Hedge Funds’ Holdings (as of September 30): $4.87 billion

Shares of alcoholic beverage maker Constellation Brands, Inc. (NYSE:STZ) have had a phenomenal sevenfold increase since the second-half of 2012 and are up by over 45% year-to-date. This explains why two more funds among those we cover held long positions in the company at the end of September and the aggregate value of their holdings in the company shot up by $738 million during the third quarter.

On January 7, shares of Constellation Brands, Inc. (NYSE:STZ) shot up by 4.5% after it reported better than expected  numbers for the third quarter of fiscal 2016. While analysts had expected the company to report EPS of $1.30 on revenue of $1.62 billion, it declared EPS of $1.42 on revenue of $1.64 billion. This impressive performance was largely driven by the strength of the company’s beer business which saw a 8% and 20%  year-over-year increase in revenue and profit respectively during the third quarter. Moreover, the growth of the beer business was also a major reason why the operating margin of the company increased to 29% of sales from 27% a year earlier.

Following the earnings release, on January 8, analysts at Stifel Nicolaus reiterated their ‘Buy’ rating on Constellation Brands’ stock and also increased their price target to $174 from $162. Billionaire Stephen Mandel’s Lone Pine Capital initiated a huge stake in Constellation Brands during the third quarter by purchasing over 4.6 million shares of the company.