Bad news in the market means good news for Constellation Brands Inc. (NYSE: STZ) which manufactures and markets spirits, wines and beers under a variety of labels. Brands include Robert Mondavi wines, Corona beer and Black Velvet whiskey. When the economy is good, folks drink to celebrate. When the economy starts to tank, people drink to commiserate. Constellation benefits either way. The company just released 1Q 2009 results. Profits jumped 50%! Diluted (no pun intended) EPS was $0.20, up from $0.13 in 1Q 2008. Consoldiated net sales increased 3%, with wine sales up 15% and spirit sales, led by vodka, up 9%. Constellation offloaded several lower profit margin lines including Almaden and Inglenook wines, and added higher product margin line wines Clos du Bois and Wild Horse.

Investors, whether drinkers or tea-totalers, like the numbers. The stock is up over 5% in the last two days, closing on July 2nd at $21.22

In an effort to fight back against shifting consumer trends to spirits and wine, the Wall Street Journal reported that Coors Brewing Co. (NYSE: TAP) has created a new subsidiary to "introduce above-premium beers to the marketplace," according to an email sent to beer wholesalers last week.

The move comes at a time when the American beer business is facing considerable headwinds, including slower growth due to upscale "craft" beers and a strong push for market share by imports. Anheuser-Busch Cos. (NYSE: BUD), the largest American beer maker, and SABMiller PLC's (NYSE: SAB) Miller Brewing Co., the second-largest, have already introduced new beverages to combat these headwinds.

If your Final Jeopardy question read "What U.S. state is home to the biggest wine producer in the world?", would you answer California? You'd be wrong. It's New York! In fact, the Fairport, N.Y. firm in question sells more than 250 brands of flavored ethanol.

Constellation Brands (NYSE: STZ) produces and markets wine, spirits and beer. The Wines division is responsible for such brands as Robert Mondavi, Inniskillin, Simi, Arbor Mist and Blackthorn (cider). The Spirits division distills such brands as Black Velvet, Chi-Chi's, Fleischmann's, Canadian LTD and Mr. Boston. The Imports division has the right to import, market, and sell Corona Extra, Corona Light, Modelo Especial, Pacifico and St. Pauli Girl. The firm distributes its products through wholesalers, government beverage control agencies and various retailers in some 150 countries. Diageo (NYSE: DEO) and Fortune Brands (NYSE: FO) are major competitors.

The company pleased investors late last month, when it reported solid Q1 results and guided FY08 EPS in-line with the average Street estimate. The CEO announced an acquisition strategy focused on European expansion, premium spirits and niche wines. Banc of America Securities subsequently reiterated its "buy" rating on the issue and boosted its price target to $27. The news kept STZ shares cycling through a positive 10-week trading channel. The price is currently moving near the base of that channel, where oversold CCI, Stochastic and Momentum technical parameters suggest the potential for a rise back toward the top.

Altogether, brokers recommend the issue with two "strong buys," one "buy," eleven "holds" and one "sell." Analysts see a 22% growth rate through the next year. The STZ P/E ratio (20.60), Price to Sales ratio (1.02), Price to Book ratio (1.73) and Price to Cash Flow ratio (11.93) compare favorably with industry, sector and S&P 500 averages. Institutions own about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $18.83 and $29.17. A stop-loss of $20.50 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the vice president of Stockwinners.com.