Word on the Grapevine: Wine Stocks

Are you looking for full bodied stocks, rich with a hint of spice, abundant with complexity, bearing nuances of acidity? Then maybe you have a taste for winery and vineyard stocks. Unfortunately, most of them look like they may have turned to vinegar.

Constellation Brands, Inc. (STZ) - The largest seller of wines in the world, its wines include Estancia, Ravenswood, Simi, Almaden, Banrock Station, Hardys, Inglenook, Vendange, Arbor Mist, Robert Mondavi Winery, Franciscan Oakville Estate, Blackstone, Robert Mondavi Private Selection, Ruffino, Alice White, Nobilo, Hardys, Woodbridge by Robert Mondavi, and Stowells. It also produces and sells beer and liquor.

Price sales ratio is a favorable .92 and the P/E ratio is 14.6. However, on Friday, March 2, the company announced that its 2008 profit would fall well below expectations, due to a glut of Australian wine and extensive competition in Britain. Both Moody’s and Fitch have lowered their ratings on the company.

Scheid Vineyards, Inc. (SVIN.PK) - This Salinas, California based company, which trades on NASDAQ, is involved in the production and sale of wine grapes and bulk wine, including Chardonnay, Cabernet Sauvignon, Merlot, Pinot Noir, Sauvignon Blanc, and Syrah. The stock has a price sales ratio of about .9 and a P/E of 7.6. Quarterly revenue growth year over year almost doubled, up 93%. This thinly traded stock trades well below its $40 book value per share.

Willamette Valley Vineyards, Inc. (WVVI) - This Oregon based company, founded in 1983, owns and manages vineyards and a winery. Its labels include Pinot Noir, Chardonnay, Pinot Gris, Riesling and Oregon Blossom. Price sales is 2.3 and P/E is about 26. Quarterly revenue growth year over year was down 8.6% and quarterly earnings growth was down over 28%.

360 Global Wine Company (TSIX.OB) - This Sonoma, California based company, founded in 2002, is a producer and seller of wines. Its wine brands include Viansa, and its Viansa winery receives over 1,000 visitors per day. Although its price sales ratio is a reasonable 1.1, its loss per share is significant: net loss per share was over $25 for the six month period ending June 30, 2006, versus about $13 per share loss for the same period during the previous year.

Disclosure: Author does not own any of the above.