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Core-Mark Holding Company, Inc. (CORE) Message Board

  • joebsib joebsib Apr 7, 2010 10:09 AM Flag

    starting a position?

    I am looking at this stock to start a long position

    Any feedback on the recent decline? Buying Opportunity or is it heading South?

    Company fundamentals look good to me,

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    • beware of understanding the core earnings of the company. it starts with understanding the one time gains that accrue to company when Feds and States increase taxes on cigarettes. in 2009 you had a big Federal tax hike that has been amply discussed by the company and quantified as to its P&L impact. the members of the FREE PRESS who highlight this as a 7x P/E story are just scratching on the surface and not providing their readers with well reasoned and thorough analysis. Of course all you need these days to publish stock picks is a screening tool to come up with great names. with low p/e ratios trading at close or below book with no debt. etc

      i own this as a long term investment. I do expect the net income to be a lot lower than in 2009. it could be 50% lower with no insult to the company, its business model and financial strength.

      There are warrants out trading on this and I dont remember maturity. I opted for now for the stock as I prefer the steadiness in principal over big jumps up or down.

      I generally believe that the same forces that pushed this up to 34 dollars have the potential to push this down to 25 again. At 34, there is certainly a lot of informed institutional investor who take off some chips temporarily, knowing that earnings will be lower in 2010 and likely even in 2011.

      5 years after bankruptcy one can say that the accomplishments of this company are all too apparent and it is likely that over long periods of time you will own a larger entity with presence in more markets with same absolute profits or greater.

      From my vantage point, convenience stores have not been all that bulletproof/recession proofs stocks overall as some market observers like to put it. my experience from talkign to some owners and reviewing publicly traded ones is that there is no such thing as a safe haven when consumer discretionary dollars are sitting tight. companies in this industry generally work harder and smarter these days for the same money.

      i do expect more consolidation in the industry.

      net debt free, i do expect CORE to participate in M&A.

      • 1 Reply to grazingbull_2000
      • Future earnings look good here. Looking at 'earnings estimates" at WSJ compared to estimates of three months ago, earnings are up quarter by quarter. Earnings estimates for CORE are also up in 2010 and 2011. In fact, estimates for 2011 are up by a solid 18% over 2010.

        Earnings per share in 2009 were $4.87..... this year they are expected to come in at $5.50-13% higher.

        So, I guess I'd agree with the post indicating it's a long term investment (and a good one) but not with the expectation that net income will be a lot lower,

        <i own this as a long term investment. I do expect the net income to be a lot lower than in 2009. it could be 50% lower with no insult to the company, its business model and financial strength.>

    • It could be a good starting position. I invest for a hobby and probably won't contribute the most insightful responses, but a look at the insider transactions lists a number of insider sells recently. CORE just had a record year and I am sure part of the compensation was stock options. It looks as though of the management ranks that are looking to raise cash are selling their options on the same day. Is this a bad sign or is it management simply trying to raise cash for a new boat? I think it is the latter. I'm long...

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