Monday, August 27, 2018

Core-Mark Races Out Of Wall Street's Doghouse

So much for Core-Mark (CORE) needing time to rebuild confidence in its business, or at least insofar as the Street goes. Core-Mark reported a solid, and certainly stronger than expected, second quarter, and not only have the shares rocketed back up, but the sell-side crowd is back to doing keg stands and conga lines to celebrate the company, and scratching around for excuses to boost price targets even though their actual estimates haven’t gone up so much.

Although I thought things were looking better for Core-Mark in May, I absolutely didn’t expect the shares to double in just three months. Management has certainly made better (and faster) progress in address cost issues in two of its West Coast locations and that seems to have restored a lot of faith in the overall business plan. What’s more, pressures on the cigarette business have normalized and the non-cigarette business continues to grow nicely. I liked Core-Mark more than the Street seemed to back in May, and I’m impressed with second quarter results, but I do think the sharp upward move in the shares more than adequately reflects the improvements in the business.

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Core-Mark Races Out Of Wall Street's Doghouse

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