Saturday, April 06, 2013

Constellation Brands & Anheuser-Busch Almost Done

We’re almost at the finish line with Anheuser-Busch InBev’s (Ticker: BUD) acquisition of Grupo Modelo SAB. As you probably know, Constellation Brands, Inc. (Ticker: STZ) stands to gain a brewery and licensing rights to several Modelo brands such as Corona making it the 3rd largest brewery in the US. Constellation Brands will gain all this goody in return for the DOJ’s blessing in allowing Anheuser-Bush to acquire Grupo Modelo. Yesterday, Anheuser-Busch and Constellation Brands announced that they have reached an agreement in principle with the DOJ. It looks like they are just dotting the”i’s” and crossing the “t’s”. According to the press release, this should be finalized by April 23rd. The DOJ is basically guaranteeing the success of Constellation Brands after the completion of the merger. I plan on holding onto Constellation Brands (~ 25% of my portfolio) for a while as I see very nice growth for this company. I’ve also been writing the April 40 and 42.50 puts on Constellation Brands to collect some premium along the way.

3 Comments:

At April 06, 2013, Anonymous Anonymous said...

MT,

Nice call on STZ stock direction and option income. Stock price saw a little pop in after hours Friday evening so the trend is in your favor. Lets see if any buy side analyst's come out and issue a target stock price upgrade and opinion, unless you already have it. If so, maybe you can share. I will offer my price target and reasons when I have a chance to review some data.


Regards,

inforesource7

 
At April 08, 2013, Anonymous Anonymous said...

MT,

STZ is above all key moving averages. 52 week high is $49.21 which was crossed after hours on Friday. If it holds on Monday pre-market or goes below slightly, look for another attempt to push through on above average volume and off to the races she goes. This will be an all time high so there should not be very much resistance.


Regards,

inforesource7

 
At April 08, 2013, Blogger Money Turtle said...

STZ is scheduled to release earnings before the bell on Wednesday, April 10th. I’m hoping that the company will provide an updated guidance with some integration numbers. Most likely, they will defer until the deal actually closes… Still need anti trust approval from Mexico.

 

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