Core-Mark (CORE) has strong earnings momentum and higher estimates making it a Zacks #1 Rank (Strong Buy). CORE is our aggressive growth Rank Buy for the Ides of March.
Core-Mark Holding Company, Inc., together with its subsidiaries, markets fresh and broad-line supply solutions to the convenience retail industry in the United States and Canada. It has a network of 26 distribution centers. Core-Mark Holding Company, Inc. was founded in 1888 and is headquartered in South San Francisco, California.
Last Two Beats Show Momentum
CORE disappointed in the June 2011 quarter as earnings came in $0.10 below estimates for an 11% downside surprise. The stock, however gained 2.5% following the report. Since that time the company has beat the Zacks Consensus Estimate twice with the second beat being stronger than the first.
Following the miss, CORE then went on to beat the September 2011 estimate of $0.99 by $0.07 or 7%. The December 2011 quarter saw the momentum increase as the beat was large in absolute and percentage terms.
CORE Recently Reported Earnings
On March 8, 2012 the company reported revenue of $2.12 billion $66 million below estimates and up from $1.86 billion in the year ago period. Earnings per share came in at $0.66 up from $0.53 posted a year ago and $0.10 ahead of the Zacks Consensus Estimate. The stock moved lower by 2% following the report.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up their earnings estimates for 2012. The Zacks Consensus Estimate for 2012 EPS moved from $3.42 in February 2012 to the current level of $3.60.
CORE trades at a very reasonable valuation and at a discount to the industry average on most metrics. A forward PE multiple of 11.3x is below the broader market PE of around 13x and lower than the industry average of 15x. Price to book of 1.2x is substantially lower than the 2.4x multiple for the industry average.
A quick look at the chart shows the stock has participated in the broader rally, but to a lesser extent. Recent consolidation at the $38 level helped the stock break through the 50 moving average technical indicator and has since moved above it creating a bullish signal. CORE is a Zacks #1 Rank (Strong Buy).