If there’s one cannabis stock that you can keep all the way to retirement, this is the one…

Last week, I shared the “magic formula” for looking at an earnings report. It seems a lot of you found it helpful, and I’m glad I could cut through the financial jargon and help you get straight to the point when it comes to reading an earnings report.

I told you about three things to usually watch for and three things you can usually ignore.

I used the word “usually” because the traditional rules of investing are being thrown out the window when it comes to the cannabis industry. It’s just a market that is moving faster and will be bigger than anything I’ve ever seen in my 30+ years of trading experience.

Now, here’s where it gets tricky…

There are traditional companies trying to stake their claim in an industry some project could eventually be worth $1 trillion.

That’s when some of the old metrics do start to matter.

And in this case, I’m talking about Constellation Brands (NYSE: STZ). Revenue during any quarter is important for a company this size, as well as how the stock trades after earnings. If a big company misses its earnings, investors will generally pull their money out of the stock, and the price will dip.

If a big company exceeds expectations, you get a flood of new investors and institutions.

So while those are still two important things to consider when reviewing Constellation’s earnings, it’s not the full story.

Remember – Constellation is now in the cannabis game, so we need to look at it a little differently.

And by viewing Constellation under a different lens, you’ll see why I’m so excited for the future and the profits that will start to stream in for shareholders…

The Real Story Behind Constellation Brands

As you know by now, I keep reinforcing that branding is an important part of running any successful company.

And sometimes that means going back to the drawing board, looking at what is selling and what isn’t, and cutting your losses to become more focused. That’s why Constellation is selling 30 brands from its wine and spirits portfolio to E. & J. Gallo Winery for $1.7 billion.

Now, Constellation will focus on selling high-end wine – in addition to its beer portfolio – which has more growth opportunities.

As I said back in January, I’ve been a fan of this beer and wine company for a long time. Constellation is the best at managing product brands, and it is continuously adjusting its portfolio in anticipation of changing consumer tastes.

I also told you back in January to be prepared for Constellation to start focusing on premium-priced offerings.

This $10 bill from 1914 holds what might be the biggest secret from early America… even some of our founding fathers – George Washington and Thomas Jefferson – were in on it. But this small detail didn’t make it into the history books. Get a closer look

Oddly enough, cannabis companies are also utilizing this strategy. Instead of trying to appeal to everyone with a mid-tier product, some cannabis firms are either offering the cheapest products or charging a premium for high-end luxury lines.

So for its core business, getting sleeker and more efficient at reaching a specific audience is good news.

And when we turn to Constellation’s investment in Canopy Growth Corp. (NYSE: CGC), things get even better.

Constellation & Cannabis

Constellation owns a 37% stake in Canopy, and I’m here to tell you that not only is Constellation Brands now a cannabis company, it’s now a cannabis company I think every investor needs in their portfolio, point blank.

Make no mistake, this is not a stock to trade.

It’s a stock to buy more and more of when your wealth increases, and when you see the stock price dip, it’s great to build an even bigger position. It currently pays a dividend of $2.96, which is a yield of 1.6%. If you enter that into a dividend reinvestment program (DRIP), then you can accumulate more shares without having to pay a dime.

And an interesting note on Constellation’s dividend – it plans to increase its payout by a penny.

Now, that may not sound exciting at first, but it shows that the company is looking ahead, and current shareholders will be thankful down the road. In order to be a “Dividend Aristocrat,” a company must have a minimum of one dividend increase annually for at least the last 25 years.

That’s what Constellation is focusing on with this move.

Being on that list carries a lot of weight with risk-averse investors, and that means even more money will flow into Constellation down the road.

Constellation just started paying a dividend in 2015, so there will be a waiting period before it hits that list. However, if you own the stock now, you’re going to look really smart in the long haul.

Also remember that, with its partnership with Canopy, Constellation now has the potential to add a new line of products to its current lineup. It has the first-mover advantage in marijuana beverages just as the market takes off.

All of which proves to me that this stock has a big future.

Greg Miller
Executive Director, National Institute for Cannabis Investors

P.S. Our team of analysts just handed down their trade instructions for our next runaway pot IPO recommendation. And I want you in on the action now before the gains really start rolling in. The NICI team believes that this IPO could rapidly become our next double- or triple-digit winner shortly after its market debut. Think about that for a second. That would be ten times your initial investment on a single trade. You just have to click here to learn more about this rare opportunity.


Comments

19 responses to “Why This Cannabis Blue-Chip Stock Needs to Be in Your Portfolio”

  1. Hey Mr. Miller, I`m 75yrs. a Vietnam vet. retired truck dr. living on SS. I need some help, been reading a lot but , how do I invest or buy, do I need a broker? all this sure confuses me. Cresco`s & Remedis looks intersesting. Can you please reply

    • It’s simple call TD Ameritrade and tell them you want to set up an account,. If then transfer what you want to trade from your bank account. It has to set for three days then you can buy stock. It’s simple to trade on your phone free download app. Thanks for your service I hope this helps–Fellow Vietnam era vet.

  2. I have some stocks placed in Robinhood.com. They do not charge any commission. I am in a similar place to you. I live on my S.S. Good luck.

  3. I trade on TD Ameritrade. How does that drip plan work? I’m definitely interested in that program if I can get into it.

  4. How do we know which STZ to buy? STZ.P, STZ.N, STZ.Z, STZb.N, STZ.A I’m very confused when you only say STZ but there are all these to choose from. Thank you.

  5. Hello-I opened a TD Ameritrade account and those folks are great to deal with. I got in on a 500 trade no commission deal and that should cover me.I’m posting 35% and higher returns following Greg’s advice. The charts and position lists and so forth are easy to use. Sit tight, the best is yet to come. Thanks Greg!

  6. How much money do I need to invest in Constellation and Cannabis? I am on SSI and under a lot of pressure taking care of my son who is mentally unable to take care of himself.

  7. I want to buy in ASAP how do I do this I currently use TD Ameritrade, so many stocks to choose from what are the best to cash in in short term and long term?

  8. I have ALL of my stocks in my Ameritrade account in their DRIP Plans.. Call and ask them about it. It is FREE and NO ADDITIONAL COSTS……

  9. I am also Very interested in this (drip) program and how one would apply and what you would need to qualify if anything for this program

  10. May 4, 2019:
    I have done a Better Investing Stock Selection Guide on STZ. With dividends and growth, STZ probably will provide a 20% annual return.

  11. STZ was a good stock, list up to 3 years ago by many investment advisors. Then is declined some 25% and taken off advisors recommendations. Now, with its major investment in Canopy 38% it is now being recommended again and stock price going up. My guess is it will now be a major supplier for Canopy because it is a big supplier for wines a liquor across the USA, and has major distribution facilities across the country. Cannabis distribution is a natural sales opportunity for STZ. I own its stock.

Leave a Reply

Your email address will not be published. Required fields are marked *