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.
Core-Mark Races Out Of Wall Street's Doghouse
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