CNM - Core & Main: A Core Business Still Commands A Premium Valuation

2024-06-04 18:04:44 ET

Summary

• Core & Main is a distributor of specialized water and waste water products which enjoys solid operating performance and growth prospects.
• Shares have more than doubled since going public, as the company trades at a premium valuation.
• The company recently has seen growth through organic achievements and dealmaking, but recent earnings disappointed investors and the stock has pulled back.

When Core & Main, Inc. (CMN) went public in the summer of 2021, I concluded that a "main business" was not the same as a "main position." The distributor of (waste) water goods has seen a solid operating performance, and enjoyed decent long-term growth prospects, yet it were the demanding valuations, which made me a bit cautious....

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