This money manager won't follow Warren Buffett's path with these two stocks Berkshire's buying
New regulatory filings showed that Warren Buffett 's Berkshire Hathaway doubled its position in beer-and-wine producer Constellation Brands last quarter. But at least one investor doesn't agree with the "Oracle of Omaha's" investment. Main Street Research's Chief Investment Officer James Demmert joined CNBC's " Power Lunch " on Friday to offer his take on two Buffett trades, alongside one other market mover. Here's what he had to say during the show's "Three-Stock Lunch" segment. Constellation Brands Berkshire doubled its stake in Constellation Brands last quarter, increasing the value of the position to around $2.2 billion. Shares of Constellation Brands, which imports all of its beer from Mexico , have stumbled 11% this year as President Donald Trump's steep tariffs on Mexican imports threatened its bottom line. The stock added nearly 3% on Friday after Berkshire disclosed its position. But Demmert is skeptical of Buffett's bet. "We don't think the stars align for Constellation," he said. "The company expects a billion-dollar hit from tariffs just this year alone. Stock's down. ... Let's remember this is a lower margin business, and there's a growing trend of non-alcoholic mocktail drinkers that can have an impact. We're a seller." Citigroup With Citigroup , too, Demmert diverges from Buffett. While Berkshire sold out of its Citigroup position by the end of March, Demmert said he was a "big buyer" of the bank stock. "Investors should overweight financials in general, and for the same reasons, we own Citigroup," he said. "Valuation's at nine times earnings, which is cheap. They've got increasing [investment] bank and trading revenue deregulation, tailwinds are coming their way. And let's face it, the financials are tariff immune. So is Citi." Shares of Citi have climbed 7% in 2025. Novo Nordisk Novo Nordisk 's stock slumped 3% on Friday after CEO Lars Fruergaard Jørgensen announced he would step down from his position , citing recent market challenges. Jørgensen, who held the position for the last eight years, will remain at the helm "for a period to support a smooth transition to new leadership" as Novo Nordisk searches for a successor. But this leadership transition wasn't enough to convince Demmert the stock was a buy. He said he still sees Novo Nordisk's market share losses to rival GLP-1 medication producer Eli Lilly as a major headwind for the stock. "Lilly's taken their market share and had their lunch with it. Stock's down 52%. The company's fired the CEO, I think, to get a reaction from Wall Street," Demmert said. "It's a value trap. It's a sell."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
International Paper to exit molded fiber market, sell select Mexico sites
This story was originally published on Packaging Dive. To receive daily news and insights, subscribe to our free daily Packaging Dive newsletter. International Paper on Thursday announced a slew of changes to its North American operations, including exiting the molded fiber market entirely and closing or selling multiple facilities. This is all part of IP's 'ongoing transformation' to sharpen its focus, according to the announcement. IP is making changes at the following U.S. sites, collectively impacting some 110 hourly and 24 salaried workers: Closing a packaging facility in Marion, Ohio, come Sept. 1, which an IP spokesperson said will affect 107 employees. IP's website lists its Marion site as a container plant. This capacity will be absorbed elsewhere in IP's network. Closing its recycling facility in Wichita, Kansas, come July 31, affecting 16 employees. This capacity will be eliminated. Converting a Reno, Nevada, facility that had been supporting its molded fiber business to instead support its packaging business. This change, happening on or before July 31, will affect 11 employees. This was IP's sole production site for its 'relatively small product line' in molded fiber, which included wine packaging systems, according to Amy Simpson, head of corporate communications and corporate marketing. 'Given the small market for this product, the decision was made to streamline our operations and focus investments on products and facilities that best meet our customers' needs,' she said in an email. The company is also immediately selling some assets in Mexico to Mexican packaging and materials company Acabados de Papeles Satinados y Absorbentes, or APSA. This includes one containerboard mill and one recycling plant in Xalapa, east of Mexico City near the shore, along with another recycling plant in Apodaca, near Monterrey, closer to Texas. RBC Capital Markets highlighted in a note to investors that International Paper acquired the Xalapa mill from forest products company Weyerhaeuser in 2008, estimating its capacity as 'relatively small,' between 25,000 and 30,000 metric tons per year. IP reported that APSA intends to retain current on-site staff. Following these sales, International Paper will still have numerous other facilities in Mexico. With all of these changes, IP said that it's 'committed to minimizing the impact through job placement in existing vacancies, retirements and other internal opportunities,' and that affected employees will receive severance and outplacement support where possible. 'While difficult, these decisions will help enable IP to prioritize the right geographies, customers and products and make investments in resources to support our growth in sustainable packaging,' said Tom Hamic, president of North American packaging solutions, in a statement. In a note to investors, Michael Roxland, Truist Securities senior paper and packaging analyst, called these decisions 'consistent with IP's 80/20 strategy to streamline its North American operations and optimize its box plant and mill footprint.' The 80/20 strategy, championed by CEO Andy Silvernail, embraces the idea that 80% of results come from 20% of efforts, inspiring a more focused approach. The company is aligning investments and resources to prioritize key customers and reduce complexity and cost. Other recent changes that IP has announced include restructuring its footprint along the U.S.-Mexico border, namely closing a box plant and sheet plant in Edinburg, Texas, and shifting some operations to Reynosa, Mexico. Earlier this year, the company also announced facility closures in Arizona, Louisiana, Missouri and Pennsylvania. Recommended Reading International Paper to restructure footprint along US-Mexico border Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Here's What to Expect From Citigroup's Next Earnings Report
With a market cap of $154.3 billion, Citigroup Inc. (C) is a global financial services holding company that manages about 200 million customer accounts across more than 160 countries. It operates through five segments: Services; Markets; Banking; U.S. Personal Banking; and Wealth, offering a broad range of financial products to individuals, businesses, and governments. The New York-based company is expected to unveil its fiscal Q2 2025 earnings results before the market opens on Tuesday, Jul. 15. Before the event, analysts anticipate the U.S. bank to report a profit of $1.68 per share, up 10.5% from $1.52 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in the past four quarters. In the last reported quarter, Citigroup exceeded the consensus EPS estimate by 6.5%. Ditch Big Tech and Buy These 3 Popular Stocks in 2025 Instead Dear Nvidia Stock Fans, Watch This Event Today Closely Can Broadcom Stock Hit $400 in 2025? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! For fiscal 2025, analysts expect Citigroup to report EPS of $7.36, up 23.7% from $5.95 in fiscal 2024. Looking ahead, EPS is projected to grow 26.8% year-over-year to $9.33 in fiscal 2026. Shares of Citigroup have increased 37.8% over the past 52 weeks, outperforming both the S&P 500 Index's ($SPX) 12.1% rise and the Financial Select Sector SPDR Fund's (XLF) 26.3% return over the same period. Shares of Citigroup rose 1.8% on Apr. 15 after the bank reported better-than-expected Q1 2025 results. Total revenue increased 3% year-over-year to $21.6 billion, and EPS came in at $1.96, beating Wall Street's estimates. Net income rose to $4.1 billion, driven by lower expenses and higher revenues. Strong performance across all five business segments, particularly 12% growth in both Markets and Banking revenues and a 24% jump in Wealth revenues, boosted investor confidence. Analysts' consensus view on Citigroup's stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 22 analysts covering the stock, 11 recommend "Strong Buy," four "Moderate Buys," and seven suggest "Hold." This configuration is slightly less bullish than three months ago, with 12 analysts suggesting a "Strong Buy." As of writing, C is trading below the average analyst price target of $85.91. On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
3 hours ago
- Yahoo
CitiFX Review: Innovation, Market Impact Crucial for FX Vendors as Client Switching Declines
Citigroup Inc. (NYSE:C) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, Citi announced the results of its fifth annual CitiFX Vendor Review, which is a comprehensive analysis of the foreign exchange/FX landscape based on internal vendor evaluations and an annual client survey. The review emphasizes the need for FX vendors to innovate and prioritize market impact considerations to remain competitive. 94% of clients underscored the importance of vendor adherence to the FX Global Code, while 85% stressed that vendors must consider market impact when developing execution tools. Client feedback indicates a high level of satisfaction with primary FX vendors, with 90% of respondents expressing contentment. A team of financial advisors huddled around a desk, discussing the best investment strategy for their client. However, 85% of these satisfied clients also have enhancement requests, primarily for execution and workflow solutions designed to mitigate operational and settlement risks. The increasing demand for innovative FX solutions has led to a notable decline in vendor switching. The rate of clients changing FX vendors has dropped from 51% in 2021 to 22% in 2025. Citigroup Inc. (NYSE:C) is a diversified financial services holding company that provides various financial products and services to consumers, corporations, governments, and institutions. While we acknowledge the potential of C 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 . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
