CONSTELLATION BRANDS, INC.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Net income / market capitalization+7.81%; #1034/6340 (top 16.3%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value8.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=8.0%, ROC=28.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)

  ✗Dreman< 8x

  Price / Book Value per Share

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation Reasonableness

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=7.3%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical Average

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low129% of trailing low ($112.77)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.3485; #3470/6449 (top 53.8%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.3737; #3011/5247 (top 57.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+7.46%; #1090/4519 (top 24.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-12.36%; #3562/6202 (top 57.4%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag STZ's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $9.1B vs NCA $-4.3M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.19, IC: 8.1x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.19

  ✗Lynch< 0.33

  Cash - Long-term Debt$-9.0B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change42.90% -> 44.26%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.00

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.19

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.19

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=8.1x, D/EBITDA=3.2x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.19

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.1878; #3401/4210 (top 80.8%)

  ✗AsnessTop 30% of eligible cross-section
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag STZ's efficiency — Graham, Buffett, Piotroski +4 more

  Current Ratio1.00

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)9.0%

  ✗Buffett> 10%

  ROIC - WACC-1.0%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)28.8%

  ✓Greenblatt> 25%

  Current Ratio Change YoY0.92 -> 1.08

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.47x -> 0.42x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.00

  ✗Dreman> 1.5

  Return on Invested Capital11.7%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=11.7%; FY2024: ROIC=1.6%; FY2025: ROIC=11.7%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC7.4% (RR=63% x ROIC=11.7%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 11.7%)

  ✗SleepROIC > 12% in a majority of years
• Profitability19% pass✓ 15✗ 20▾

  13 of 16 flag STZ's profitability — Graham, Buffett, Lynch +10 more

  Net income / market capitalization+7.81%; #1034/6340 (top 16.3%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)4/25 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)20/25 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)7.2%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)29.8% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$1.2B

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR7.3%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE22.4%

  ✓Lynch> 15%

  EBIT / Enterprise Value8.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=8.0%, ROC=28.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets7.70%

  ✓PiotroskiROA > 0

  ROA Change YoY-0.38% -> 7.70% (delta: +8.08%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=12.19%, ROA=7.70%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY52.1% -> 51.6%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue26.9%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity22.4%

  ✓Dreman> 12%

  Margin of Safety

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity12.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency20/25 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue30.2%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity22.4%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend31.8% (2023) -> 29.8% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 50.4% -> 51.6%, operating margin 31.8% -> 29.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets+21.98%; #1930/3702 (top 52.1%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+22.41%; #699/5226 (top 13.4%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0368; #2167/5884 (top 36.8%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR7.3% over 3 years

  ✓Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts19% pass✓ 3✗ 13▾

  Split decision: 13 FAIL · 2 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (2/9)✗LynchFAIL (2/7)✓GreenblattRank #584✓PiotroskiPASS (F-Score 5)✓DremanPASS (5/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)✗AckmanFAIL (3/9)✗TempletonFAIL (2/8)✗SleepFAIL (1/6)✗AsnessFAIL (Rank #933/2370 (Top 39.4%))✗NeffFAIL (3/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Growth38% pass✓ 5✗ 8▾

  5 of 8 flag STZ's growth — Graham, Lynch, Ackman +2 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR7.3%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -4.2% vs Rev: -4.3%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$1.10 (2003) -> $1.36 (2006)

  ✓DremanPositive over recent years

  EPS CAGR7.3% CAGR over 3 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency20/25 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth2.5%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 50.4% -> 51.6%, operating margin 31.8% -> 29.8%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR1.2%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR7.3% over 3 years

  ✓Neff7%-20% annualized
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$1.2B

  ✓BuffettPositive and growing

  FCF Positive and Growing$1.8B

  ✗LynchPositive and growing

  Operating Cash Flow$2.7B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=12.19%, ROA=7.70%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=7.3%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive20/21 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency21/21 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$1.8B

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+7.46%; #1090/4519 (top 24.1%)

  ✗OshaughnessyTop 10% of eligible cross-section