Constellation Brands (STZ) Is Today's Strong On High Volume Stock - TheStreet

Trade-Ideas LLC identified

Constellation Brands

(

STZ

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Constellation Brands as such a stock due to the following factors:

  • STZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $174.2 million.
  • STZ has traded 150,554 shares today.
  • STZ is trading at 3.85 times the normal volume for the stock at this time of day.
  • STZ is trading at a new high 3.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on STZ:

Constellation Brands, Inc., together with its subsidiaries, produces, imports, and markets beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company sells wine across various categories, including table wine, sparkling wine, and dessert wine. The stock currently has a dividend yield of 0.9%. STZ has a PE ratio of 28. Currently there are 5 analysts that rate Constellation Brands a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Constellation Brands has been 1.3 million shares per day over the past 30 days. Constellation has a market cap of $23.8 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.17 and a short float of 1.6% with 2.11 days to cover. Shares are up 40.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Constellation Brands as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market, CONSTELLATION BRANDS's return on equity exceeds that of both the industry average and the S&P 500.
  • 48.08% is the gross profit margin for CONSTELLATION BRANDS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.44% is above that of the industry average.
  • Net operating cash flow has increased to $597.40 million or 37.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.65%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 54.4% when compared to the same quarter one year prior, rising from $195.80 million to $302.40 million.

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