Company Overview - Core & Main (CNM) closed at $54.63, down 3.12% from the previous trading session, underperforming the S&P 500's loss of 1.04% [1] - The company has experienced a 3.74% decline prior to the current trading day, lagging behind the Industrial Products sector's gain of 11.93% and the S&P 500's gain of 1.75% [1] Earnings Projections - The upcoming earnings per share (EPS) for Core & Main is projected at $0.48, reflecting a 45.45% increase compared to the same quarter last year [2] - Revenue is estimated to be $1.58 billion, indicating a 6.82% decrease compared to the same quarter last year [2] Full Year Estimates - For the full year, earnings are projected at $2.93 per share, representing a 37.56% increase from the previous year, while revenue is expected to be $7.66 billion, showing a 2.98% increase [3] - Recent changes in analyst estimates are crucial as they reflect short-term business trends, with positive revisions indicating a favorable outlook on business health and profitability [3] Valuation Metrics - Core & Main is currently trading with a Forward P/E ratio of 17.7, which is lower than the industry average Forward P/E of 19.7 [6] - The company has a PEG ratio of 2.01, compared to the Manufacturing - Tools & Related Products industry's average PEG ratio of 1.8 [6] Industry Context - The Manufacturing - Tools & Related Products industry is part of the Industrial Products sector and holds a Zacks Industry Rank of 93, placing it in the top 38% of over 250 industries [7] - The Zacks Industry Rank assesses the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Core & Main Inc. (NYSE:CNM) is highlighted as a strong IPO stock to consider for investment, with Wells Fargo raising its price target to $65 from $57 while maintaining an Overweight rating, indicating positive sentiment despite market volatility anticipated in early 2026 [1] - RBC Capital also raised its price target for Core & Main to $63 from $62, maintaining an Outperform rating, but expressed caution regarding ongoing challenges in housing affordability and potential shifts in the repair and remodeling market later in the year [3] Market Conditions - Wells Fargo noted that builders are currently facing high risks following a recent market rally, suggesting that while product offerings are varied, they do not present particularly compelling investment opportunities at current stock levels [2] - The firm anticipates continued volatility in the sector, with homebuilders exhibiting the most caution, while distribution and building products OEMs are viewed more favorably due to attractive valuations [3] Company Overview - Core & Main Inc. specializes in distributing water, wastewater, storm drainage, and fire protection products and related services across the United States, indicating a focus on essential infrastructure needs [4]

Core Thesis - Core & Main, Inc. (CNM) is positioned to benefit from increased public-sector infrastructure spending, especially with expectations of lower interest rates stimulating municipal projects [2][3][4] Company Overview - Core & Main is a leading distributor of essential infrastructure products such as pipes, valves, meters, and fittings, serving municipalities, contractors, and select water utilities [2] - As of January 29th, CNM's share price was $54.19, with trailing and forward P/E ratios of 24.21 and 21.83 respectively [1] Investment Catalysts - The investment from Congressman Michael McCaul's household, amounting to $250,000–$500,000, has drawn attention to CNM's fundamentals and potential growth [2] - Expectations of the Federal Reserve cutting interest rates are anticipated to lower financing costs, thereby increasing demand for CNM's products [3] - The company's business model is closely tied to public-sector infrastructure spending, which is expected to expand as borrowing costs decrease [2][3] Financial Performance - Core & Main has demonstrated steady mid-single-digit growth and generates approximately $600 million in free cash flow, showcasing high cash conversion compared to peers [3] - The company maintains a resilient core business even amid rate headwinds, with easing financial conditions likely to enhance performance further [4] Valuation Outlook - A 2–3 year price target of around $85 suggests significant upside potential as infrastructure spending cycles strengthen [4]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1][13] - The energy demands of AI technologies are significant, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is highlighted as a critical player in the AI energy sector, owning essential energy infrastructure assets that are poised to benefit from the increasing energy demands of AI [3][7] - This company is not a chipmaker or cloud platform but is positioned as a "toll booth" operator in the AI energy boom, collecting fees from energy exports [5][6] Financial Position - The company is noted for being debt-free and holding a substantial cash reserve, which is nearly one-third of its market capitalization, making it financially robust compared to other firms in the sector [8][10] - It also has a significant equity stake in another AI-related company, providing investors with indirect exposure to multiple growth opportunities without the associated premium costs [9] Market Trends - The company is strategically aligned with several market trends, including the onshoring boom driven by tariffs, a surge in U.S. LNG exports, and a focus on nuclear energy as a clean power source [14][7] - Wall Street is beginning to take notice of this company due to its unique position and undervaluation, with some hedge fund managers discreetly promoting it to wealthy clients [10][9] Future Outlook - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, reinforcing the notion that investing in AI is a way to back the future [12] - The potential for significant returns is emphasized, with projections suggesting a possible 100% return within 12 to 24 months for investors who act now [15]

Market Overview - The U.S. stock market experienced a rally in 2023 and 2024, continuing into 2025, with the Dow, S&P 500, and Nasdaq Composite increasing by 13%, 16.4%, and 20.4% respectively [1] - December 2024 showed mixed results, with the Dow and S&P 500 rising by 0.7% and 0.3%, while the Nasdaq Composite fell by 0.5% due to profit booking in AI-centric technology stocks [2] - Strong fundamentals, solid fourth-quarter earnings projections, and accommodative Fed policies are expected to support market momentum in January 2025 [3] Investment Opportunities - Stocks with favorable Zacks Rank and momentum are recommended for investment in January, including Robinhood Markets Inc. (HOOD), MongoDB Inc. (MDB), Samsara Inc. (IOT), Ciena Corp. (CIEN), and Core & Main Inc. (CNM) [4] Robinhood Markets Inc. - Robinhood operates a financial services platform allowing investments in various assets, including cryptocurrencies [5] - The company is focusing on growth through product innovation, including AI tools and global expansion, with new features like Cortex and Legend enhancing user engagement [6][8] - Robinhood's expected revenue and earnings growth rates are 22% and 20.6% respectively for the current year, with a 5.7% improvement in earnings estimates over the last 30 days [10] MongoDB Inc. - MongoDB has expanded its Atlas platform into analytics, targeting modern workloads and generative AI applications [11] - The company has seen strong adoption across enterprises, with a focus on larger deals and efficient customer acquisition [12] - Expected revenue and earnings growth rates for MongoDB are 17.5% and 17% respectively for the next year, with a significant 29.6% improvement in earnings estimates over the last 60 days [14] Samsara Inc. - Samsara connects physical operations data to its cloud platform, developing sensor systems for analytics [15] - The company's Connected Operations Cloud includes AI capabilities and is expected to see revenue and earnings growth rates of 19.8% and 12.9% respectively for the next year [16] Ciena Corp. - Ciena reported a 20% year-over-year revenue increase and 69.5% EPS growth, driven by AI demand from cloud and service providers [17] - The company expects revenue for fiscal 2026 to be between $5.7 billion and $6.1 billion, reflecting nearly 24% growth at the midpoint [19] - Ciena's expected revenue and earnings growth rates are 24.3% and 97.7% respectively for the current year, with a 19.7% improvement in earnings estimates over the last 30 days [21] Core & Main Inc. - Core & Main distributes water and fire protection products to various markets in the U.S. [22] - The company has an expected revenue and earnings growth rate of 3% and 7.7% respectively for the next year, with a 24.4% improvement in earnings estimates over the last 30 days [24]

Core Point - Core & Main has entered into a definitive agreement to acquire Pioneer Supply, a distributor of water, wastewater, and storm drainage products [1] Company Summary - Core & Main is expanding its operations through the acquisition of Pioneer Supply, which specializes in water-related products [1] - The acquisition is expected to enhance Core & Main's distribution capabilities in the water and wastewater sectors [1] Industry Summary - The acquisition reflects ongoing consolidation trends within the water and wastewater distribution industry [1] - Companies in this sector are increasingly focusing on expanding their product offerings and distribution networks to meet growing demand [1]

Core Viewpoint - Core & Main (CNM) is positioned as a strong investment opportunity due to a significant revision in the company's earnings estimates, indicating a positive earnings outlook that may continue to drive stock gains [1][9] Earnings Estimates - Analysts are increasingly optimistic about the earnings prospects for Core & Main, leading to higher earnings estimates that are expected to positively impact the stock price [2] - For the current quarter, the earnings estimate is projected at $0.48 per share, reflecting a 45.5% increase from the previous year's reported figure, with a 40.82% rise in consensus estimates over the last 30 days [5] - The full-year earnings estimate is expected to be $2.94 per share, representing a 38.0% increase from the prior year, with a 27.49% increase in consensus estimates during the same timeframe [6][7] Zacks Rank - Core & Main has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which is a reliable indicator of potential stock performance [8] - The Zacks Rank system has a proven track record, with Zacks 1 Ranked stocks averaging a 25% annual return since 2008, suggesting that Core & Main could outperform the market [3][8] Stock Performance - The stock has gained 6.3% over the past four weeks, driven by solid estimate revisions, indicating strong investor interest and potential for further growth [9]

Core Investment Thesis - Core & Main (CNM) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank, indicating strong investment potential [2][10] Earnings Growth - The historical EPS growth rate for Core & Main is 0.4%, but projected EPS growth for this year is expected to be 6.4%, surpassing the industry average of 5.2% [5] Cash Flow Growth - Core & Main's year-over-year cash flow growth stands at 15.2%, significantly higher than the industry average of -1.6% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 28.3%, compared to the industry average of 6.2% [7] Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Core & Main, with the Zacks Consensus Estimate for the current year increasing by 1% over the past month [8] Overall Positioning - Core & Main holds a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance in the market [10]

Core Business Overview - Core & Main is a leading distributor in the U.S. water and fire protection infrastructure market, leveraging a broad product portfolio and deep industry relationships [1] - The company's scale and specialized expertise support critical infrastructure projects and ongoing maintenance needs for diverse end markets [1] - Its strategic focus on essential utility and construction sectors provides resilience and consistent demand in varying economic cycles [1] Financial Performance - Fiscal third-quarter sales rose 1.2% year over year to $2.06 billion, driven largely by acquisitions [6] - Gross margin expanded to 27.2%, with net income climbing to $143 million and adjusted EPS rising to $0.89 [6] - Operating cash flow reached $271 million for the quarter, and the company repurchased $50 million of stock while increasing its buyback authorization by another $500 million after quarter-end [6] Market Position and Investor Activity - As of Friday, shares of Core & Main were priced at $54.00, up about 5% over the past year, underperforming the S&P 500, which is up about 15% in the same period [2] - Tribune Investment Group LP initiated a new holding in Core & Main during the third quarter, reporting ownership of 335,000 shares valued at approximately $18.03 million as of September 30 [3][4] - The timing of Tribune's investment coincided with a period of volatility, as the stock fell roughly 27% following its fiscal second-quarter earnings report [5] Strategic Insights - Core & Main's portfolio is tilted toward industrial and infrastructure-linked names, indicating a focus on aging water infrastructure and disciplined capital returns [7] - The company may not outperform every year, but its steady cash generation explains why patient capital is willing to invest when sentiment is low [7] - Shares have already increased about 7% since the latest earnings release, suggesting a long-term investment thesis rather than a short-term focus [7]

Core Investment Activity - Tribune Investment Group established a new position in Core & Main by acquiring 335,000 shares valued at approximately $18.03 million during the third quarter [1][2] - This new position accounts for 8.74% of Tribune's 13F reportable assets under management as of September 30 [3] Company Performance - Core & Main reported a revenue of $7.76 billion and a net income of $435 million for the trailing twelve months [4] - In the fiscal third quarter, sales rose 1.2% year over year to $2.06 billion, with a gross margin of 27.2% [11] - Net income for the quarter climbed to $143 million, adjusted EPS rose to $0.89, and operating cash flow reached $271 million [11] Market Position and Strategy - Core & Main is a leading distributor in the U.S. water and fire protection infrastructure market, focusing on essential utility and construction sectors [6] - The company operates a distribution-focused business model, generating revenue primarily through the sale of infrastructure products and value-added services [9] - Core & Main's strategic focus on aging water infrastructure and disciplined capital returns supports its resilience in varying economic cycles [12]