Trading Nation

Traders bet on one beverage and alcohol stock this holiday season

Share
VIDEO8:1208:12
These beverage and booze stocks are buys this holiday season, traders say

Wells Fargo is in high spirits this holiday season.

Analysts divvied up the beverage and booze space on Tuesday – initiating Coca-Cola, Monster and Constellation Brands as overweight on growth prospects and PepsiCo, Keurig Dr. Pepper and Molson Coors as equal weight.

Todd Gordon, founder of TradingAnalysis.com, is backing Wells Fargo's call on one of those stocks.

"We like Constellation. The dividend is at about 1.4%, it's only trading at 20.5 times next year's earnings, 37 trailing [price-earnings]. It's not overly valued," Gordon told CNBC's "Trading Nation" on Tuesday.

Gordon noted that Constellation appears to have broken through trend line resistance at $195. Should it hold that level, he would look to add the stock to his portfolio. Constellation traded above $209 on Wednesday.

Mark Tepper, president of Strategic Wealth Partners, also sees value in Constellation Brands, citing strength in its Mexico-imported beers and higher-end wines. He says it also has exposure to one high-growth segment.

"With Constellation Brands, let's not forget you also get the call option on the cannabis business with Canopy Growth … and that's an industry that is just looking better and better every single day. I mean, all those stocks are going up," Tepper said.

Constellation Brands holds a 38% stake in cannabis producer Canopy Growth. Total sales for Canopy are expected to increase 48% for fiscal 2021 ending in March.

Disclosure: Strategic Wealth Partners holds STZ.

Disclaimer