Shares of this alcohol company have soared 750% in 5 years - and it still may be underrated
Constellation - the parent company of brands like Corona Extra, Modelo Especial, and Svedka Vodka - has seen shares soar 750% in the past five years. According to Wall Street analysts, the growth is just beginning.
Constellation's biggest opportunities are in the wine and beer businesses.
The company recently acquired wine brands The Prisoner and Meiomi for a combined $600 million.
Constellation has also streamlined operations in its beer business, leading to higher profit margins, the analysts write.
Corona, the fifth-best-selling beer in America, despite horrible taste ratings, became so popular it faced a shortage last year.
The company told The Wall Street Journal it spent $1.5 billion to expand its main brewery on the Mexican border. It's also trying to open a new plant in California, with the goal of doubling its output by 2018.
"We're doubling capacity and brewing at the same time," an executive from parent company Constellation told The Journal at the time.
The beer's popularity is perplexing because critics agree that Corona tastes terrible.
"After 3,200 reviews at RateBeer.com, Corona has a grade of 1.69 out of 10," according to Businessweek. "The Beer Advocate gives Corona an 'awful' rating of 55 out of 100 and the following description: 'faded aromas of sulfur, faint skunk, mild cooked veggies.'"
Corona's success is also puzzling because traditional beer brands like Budweiser are facing declining sales.
So how has Corona managed to become so popular?
It's all in the marketing.
Constellation began marketing the beer very aggressively in recent years. The company specifically aims to get people to buy the beach-friendly beer in the winter months with a series of ads featuring football coaches and Thanksgiving dinner.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas