Constellation Brands CEO casts stock drop as 'total overreaction,' says he bought shares in the last week - CNBC CNBC - Thu 10 Jan 06:38 GMT
Jim Cramer hears from Constellation Brands' outgoing and incoming CEOs after the alcohol distributor disappointed Wall Street with its 2019 forecast.
Constellation Brands' share drop after earnings was a "total overreaction" that made the stock "an absolutely fantastic value," CEO Rob Sands told CNBC's Jim Cramer after the company's fiscal third-quarter report.
The 12.42 percent plunge, which brought the alcohol distributor's shares to a new 52-week low, made the stock so enticing that Sands and his brother, Richard Sands — who serves as Constellation's chairman of the board — bought the stock themselves, the CEO said Wednesday on "Mad Money."
Calling the stock "way oversold," Sands told Cramer that he and his brother acquired 1.1 million shares of Constellation "in the last week or so."
But the weakness in low-end wines was well-known, Sands argued, noting that "that segment of the wine industry is performing very poorly" on the whole and that Constellation is working on fixing that issue in the near term.
Sands added that assuming Constellation follows through on its shareholder returns and exercises all of its warrants in Canopy, his company will still get back to its goal debt-to-EBITDA range of 3.5 to 4.0.