Citigroup Inc (NYSE: C) has been in spotlight in recent sessions after a regulatory filing confirmed that legendary investor Warren Buffett has pulled out of the financial services giant “entirely”.
On the other hand, the investor known broadly as the “Oracle of Omaha” doubled his stake in the Victor headquartered alcoholic beverage company, Constellation Brands Inc (NYSE: STZ), in Q1.
But James Demmert – the chief investment officer of Main Street Research, disagrees with Buffett on both of those moves.
Why Demmert disagrees with Buffett on Citi stock?
Berkshire’s latest 13F filing with the US regulator confirms that it closed its entire position in Citi in the first quarter of 2025.
The conglomerate had a sizable stake in the bank stock, comprising more than 14.5 million shares at the start of this year. Still, Demmert is a “big buyer” of C shares at current levels, he told CNBC in a recent interview.
Citi stock is currently going for about nine times earnings, which the Main Street expert dubbed inexpensive last week on “Power Lunch”.
“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 – and so is Citi,” he argued.
Note that Citigroup reported its financial results for the first quarter in April that handily topped Street estimates. The financial service behemoth earned $1.96 a share in its fiscal Q1 on $21.60 billion in revenue.
Analysts were at $1.85 per share and $21.29 billion, respectively. Plus, the NYSE listed financial services behemoth currently pays a healthy dividend yield of nearly 3.0%, which makes it all the more attractive to own in 2025.
Why Demmert disagrees with Buffett on STZ shares?
Constellation Brands has been an underperformer year-to-date due to the Trump administration’s aggressive tariffs on Mexican imports. The NYSE listed firm sources all of its beer from Mexico.
Still, the influential investor, Warren Buffett, increased his stake in the Fortune 500 company by about 100% to $2.2 billion in the first quarter, indicating immense confidence in what the future holds for it.
However, Main Street’s chief investment officer does not share Buffett’s optimism on STZ stock. “We don’t think the stars align for Constellation Brands,” he warned in a CNBC interview.
James Demmert cites a billion-dollar hit the beer, wine, and spirits giant expects from tariffs this year for his dovish view, adding, “it’s a lower margin business, and there’s a growing trend of non-alcoholic mocktail drinkers that can have an impact.”
In April, Constellation Brands reported better-than-expected results for its fiscal Q4 but offered disappointing guidance for the full year. That said, STZ is a dividend stock that currently yields 2.09% at the time of writing.
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