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At SlingShot Trader, we recently traded a short-term call position in Constellation Brands, Inc. Class A (NYSE:STZ) that went very well. We took profits about two weeks before earnings were due on June 29, as we didn’t want to get caught in a big implied volatility crush.

Earnings were indeed reported Friday morning and, while revenues were above expectations, STZ missed on the bottom line. An EPS miss has been rare for STZ, but most of the negatives can be attributed to issues that are either cyclical (a stronger dollar, high metal costs) or part of the growth strategy (higher advertising and marketing expenses). We feel strongly that the premise for the trade prior to earnings still stands. From a medium-term perspective (3-9 months), the upside outweighs the potential downside.

With that preface, we will repeat much of the earlier bullish argument we had given for a position in STZ:

Like most investors, we are concerned with the threat of a trade tit-for-tat with the United States’ North American trading partners. One obvious target of a trade war would be beverage-exporters. However, we think that it will create an opportunity with STZ to the upside as investors seek an alternative beverage products company with more import- than export-exposure. STZ is focused on imports to the U.S. and should avoid the targeted tariffs that may afflict companies like Brown-Forman Corporation Class B (NYSE:BF.B) — maker of Jack Daniel’s and other brands — if the trade situation deteriorates.

STZ dominates the growth numbers in the high-end beer market in the U.S., with a specific focus on imported beers appealing to the U.S. Hispanic population. The craft-beer and spirits category has also consistently grown. The company has accounted for over 35% of total beverage alcohol growth over the last year.

We think one of the most important bullish factors isn’t yet a material top-line contributor — the potential for marijuana sales with STZ’s distribution network. STZ is a 10% owner of Canopy Growth Corp (NYSE:CGC), the largest publicly traded cannabis supplier in the world. Don’t misunderstand, we aren’t making big projections for real profits in the short term from medical and recreational marijuana. Instead, we are suggesting that STZ is uniquely positioned to generate investor excitement in this new industry.

From a technical perspective, STZ is still very interesting. The EPS miss led to selling on Friday morning, but the stock stopped at support near $215 per share. A rally from here back to prior highs is likely in the short term as investors look for growth opportunities in the consumer sector.

We are using a short-put position to take advantage of this trade due to the recent back and forth in the market:

‘Sell to open’ the STZ August 3rd $217.50 Put (STZ180803P00217500) for a minimum target price of $3.50.

This is still very bullish, but the put premium is a built-in hedge that gives us some protection to the downside. As it is, the short-put position gives us an expected upside of just over 8% through the next few weeks. Assuming the put expires worthless — allowing us to walk away with no further obligation and the full value of the put premium we collect today — we would re-evaluate the trade to decide if a new short put or outright long position in the stock is best.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.