Aristotle Capital Value Equity Strategy Sold Constellation Brands (STZ) Despite Steady Business Rationale

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets hit new all-time highs in Q4 2025, with the S&P 500 Index up 2.66% and the Bloomberg U.S. Aggregate Bond Index rising 1.10%. Value stocks outperformed growth stocks, and the U.S. economy showed resilience. Artificial intelligence was a major theme, with over 300 S&P 500 companies mentioning "AI" in earnings calls, boosting mega-cap tech stocks. However, concerns arose about AI revenue circularity, capital spending, and long-term investment returns. Against this backdrop, the Composite returned 1.45% pure gross of fees (0.95% net of fees), lagging the Russell 1000 Value Index’s 3.8% gain and the S&P 500 Index’s 2.66% gain. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Aristotle Capital Value Equity Strategy highlighted stocks like Constellation Brands, Inc. (NYSE:STZ). Constellation Brands, Inc. (NYSE:STZ) is a leading US-based manufacturer of beer, wine, and spirits. On February 3, 2026, Constellation Brands, Inc. (NYSE:STZ) stock closed at $160.62 per share. Constellation Brands, Inc. (NYSE:STZ) delivered a 14.33% return in the past month, and its shares are down 7.08% over the past twelve months. Constellation Brands, Inc. (NYSE:STZ) has a market capitalization of $27.963 billion.

Aristotle Capital Value Equity Strategy stated the following regarding Constellation Brands, Inc. (NYSE:STZ) in its fourth quarter 2025 investor letter:

"We first invested in Constellation Brands, Inc. (NYSE:STZ), the premium beer, wine and spirits company, in the fourth quarter of 2021. At the time, we believed the company was well positioned to benefit from its dominant share of the fast-growing Mexican imports segment of U.S. beer, supported by iconic brands such as Modelo, Corona and Pacifico, hard-to-replicate production assets in Mexico, and a management team with a strong track record of building brands and marketing imported brands to mainstream U.S. consumers and expanding distribution. Over our holding period, Constellation continued to benefit from the growing popularity of Mexican beer in the U.S and its core beer segment remained a clear source of strength. However, the timing and magnitude of several key catalysts evolved. Expansion of shelf space and overall distribution progressed more slowly than expected, while improvement in the Wine & Spirits segment proved more challenging, pushing meaningful margin recovery further into the future. As a result, while the long-term strategic rationale for the business remains intact, we determined that Constellation was the most appropriate candidate for sale to fund a new investment in the first quarter of 2026, to be discussed in greater detail next quarter."

Constellation Brands, Inc. (NYSE:STZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 50 hedge fund portfolios held Constellation Brands, Inc. (NYSE:STZ) at the end of the third quarter, compared to 42 in the previous quarter. While we acknowledge the potential of Constellation Brands, Inc. (NYSE:STZ) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Constellation Brands, Inc. (NYSE:STZ) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.