Our Mexican beer powerhouse is down on a rival's troubles — so we're buying the dip

We're buying 50 shares of Constellation Brands at roughly $246 each. Following Monday's trade, Jim Cramer's Charitable Trust will own 375 shares of STZ, increasing its weighting in the portfolio to 2.8% from 2.46%. Shares of Mexican beer maker Constellation Brands were down 3% on Monday after Heineken reported weaker-than-expected earnings. Adding to the disappointment was a nearly $1 billion impairment charge Heineken took on its stake in the largest brewer in China. We think the selloff in Constellation, which has Corona and Modela under its brand umbrella, is undeserving, and we're viewing this pullback as an opportunity to buy back the 50 shares we sold at $258 earlier this month at much lower prices. We're also upgrading Constellation stock back to our buy-equivalent 1 rating . Heineken and Constellation are very different companies. For starters, let's compare the geographic base. Heineken missed the mark in every region — with sales in Europe, Americas, Asia Pacific as well as Africa and Middle East, all missing street expectations. Only Americas and Asia Pacific grew revenue in the quarter. In Europe, Heineken's largest market at about 40% of total revenue, the company blamed bad weather in June as a reason for the lower growth. Heineken owns tons of brands including smaller Mexican beers Dos Equis and Tecate. While Constellation is not immune to weather-related pressure, it is immune to rain and colder temperatures overseas. The company gets all its revenue from the United States. The customer base is also vastly different, especially in the United States. One reason why Constellation has been able to deliver 57 consecutive quarters of depletion growth despite a slower to no growth beer category is because of customer loyalty, especially among the Hispanic community. In Constellation's first quarter for the three months ended May 31, its beer segment grew sales by 8% and operating income by 16%. STZ YTD mountain Constellation Brands YTD "Our Beer business has tremendous brand loyalty and therefore it continues to excel despite whatever might be going on with other beer companies or with other brands in the sector," CEO Bill Newlands explained on the July post-earnings call. "I mean, when you look at the Hispanic consumer, which is one we watch very closely given it's more than 50% of our overall mix, that consumer buy rate was up compared to the total consumer," Newlands later added. Heineken doesn't have that type of loyalty here. Arguably, no one does. In the long term, we remain positive on Constellation not just for the momentum in its beer portfolio but also for the potential of a huge increase in share repurchases after the company gets past this peak capital expenditure spending year. (Jim Cramer's Charitable Trust is long STZ. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.