Group 1 - Core & Main, Inc. (NYSE: CNM) has strong growth prospects driven by aging infrastructure in municipal markets and solid demand in heavy non-residential sectors due to reshoring trends [1] - The residential and light non-residential markets are also expected to experience growth [1] - The focus is on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1]

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry is expected to grow due to strong demand for machinery tools in industrial and automotive sectors, driven by urbanization and investments in product development [1][4] - The industry includes companies that develop and distribute various tools and technologies used across multiple sectors, including industrial, commercial, oil & gas, and automotive [3] Growth Drivers - Strength in end markets, particularly in industrial, automotive, and packaging, is anticipated to boost the industry's growth, with increased reliance on electrical devices further driving demand for manufacturing tools [4] - Continuous investments in product development and innovation are crucial for maintaining competitiveness, although they may lead to highly leveraged balance sheets [5] - An acquisition-based growth strategy is being employed by industry participants to expand customer reach and product offerings, allowing them to enter new markets and mitigate risks associated with reliance on a single market [6] Market Performance - The Zacks Manufacturing-Tools & Related Products industry currently holds a Zacks Industry Rank of 84, placing it in the top 34% of over 250 Zacks industries, indicating solid prospects [7][8] - Over the past year, the industry has underperformed compared to the sector and the S&P 500, with a growth of 3.1% against the sector's 16.6% and the S&P 500's 26.4% [9] Valuation Metrics - The industry is trading at a forward 12-month Price-to-Earnings (P/E) ratio of 18.95X, which is lower than the S&P 500's 22.33X and the sector's 19.65X [11] Key Companies - Core & Main, Inc. (CNM) is benefiting from increased demand for its products and recent acquisitions, with a revised earnings estimate of $2.16 per share for fiscal 2024 [13][14] - Stanley Black & Decker, Inc. (SWK) is expected to gain from a global cost-reduction program and has seen a 0.5% upward revision in its earnings estimate for 2024 [16][17] - Lincoln Electric Holdings (LECO) is focusing on strategic acquisitions and new product launches to drive growth, with a history of exceeding earnings estimates [23][19] - Kennametal Inc. (KMT) is experiencing momentum in its Infrastructure segment and has made significant investments in product development [21][22]

Core Viewpoint - Core & Main (CNM) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3] Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6] - For Core & Main, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10] Earnings Estimate Revisions - For the fiscal year ending January 2025, Core & Main is expected to earn $2.16 per share, reflecting a 0.5% change from the previous year, with a 3.2% increase in the Zacks Consensus Estimate over the past three months [8][10] Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7][9] - The upgrade of Core & Main to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]

Core Insights - Core & Main (CNM) has reached a significant support level and crossed above the 200-day moving average, indicating a long-term bullish trend [1] - CNM shares have increased by 11.6% over the past four weeks, reflecting positive market momentum [2] - The company currently holds a Zacks Rank 3 (Hold), suggesting potential for continued growth [2] Earnings Estimates - There have been three upward revisions in earnings estimates for CNM for the current fiscal year, with no downward revisions, indicating positive sentiment among analysts [3] - The consensus earnings estimate for CNM has also increased, further supporting the bullish outlook [3] Technical Indicators - The 200-day simple moving average is a key technical indicator that helps establish long-term market trends and serves as a support or resistance level [2] - The recent price movements and technical indicators suggest that CNM may be positioned for further gains in the near future [3]

Group 1 - The individual investor focuses on managing personal capital accumulated over the years, utilizing a diverse range of investment strategies including fundamental, technical, and momentum investing [1] - The investor aims to leverage the strengths of various investment approaches to refine their investment process [1] - The purpose of writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors [1]

Group 1 - Core & Main (NYSE: CNM) experienced a significant positive impact on its shareholders on December 3rd, indicating strong market performance [1] - The company is involved in the distribution of a vast array of products, with hundreds of thousands of SKUs available [1] Group 2 - Crude Value Insights provides an investment service focused on the oil and natural gas sector, emphasizing cash flow and the potential for value and growth [1] - Subscribers to Crude Value Insights benefit from a model account featuring over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2]

Core Insights - Core & Main exceeded third-quarter earnings and revenue forecasts, benefiting from acquisitions [1] - The company set records for quarterly revenue and adjusted EBITDA [1] - CEO Steve LeClair highlighted the impact of five acquisitions on expanding geographic presence and product lines [1] Financial Performance - Core & Main reported third-quarter earnings per share (EPS) of $0.69, with revenue increasing 11.5% year-over-year to a record $2.04 billion [1] - Adjusted EBITDA reached an all-time high of $277 million, surpassing consensus estimates [1] - Sales gains were primarily driven by acquisitions and higher end-market volumes [1] Outlook and Guidance - Core & Main raised its fiscal 2024 guidance, projecting net sales between $7.35 billion and $7.45 billion, and adjusted EBITDA between $915 million and $935 million [2] - This is an increase from previous estimates of $7.30 billion to $7.40 billion in sales and $900 million to $930 million in adjusted EBITDA [2] - The company's shares have risen approximately 38% this year [2]

Financial Data and Key Metrics Changes - Core & Main reported record quarterly sales of over $2 billion and adjusted EBITDA of $277 million, achieving nearly 12% sales growth in Q3 2024 [7][38] - Net sales grew approximately 12% in Q3 to $2.04 billion, with acquisitions contributing about 9% of sales growth and organic volumes up mid-single digits [38][39] - Gross margins for the quarter were 26.6%, down from 27% in the prior year, but improved sequentially by 20 basis points from the second quarter [40][41] - Net income decreased to $140 million from $158 million in the prior year, primarily due to higher SG&A and interest expenses [43] - Adjusted EBITDA increased approximately 7% to $277 million, with adjusted EBITDA margins decreasing 60 basis points year-over-year to 13.6% [44] Business Line Data and Key Metrics Changes - The residential end market showed modest growth, with expectations for stronger construction activity if mortgage rates decline [14] - Municipal demand, representing over 40% of the business, demonstrated steady growth historically due to the need to replace aged water infrastructure [16] - Meter sales grew by 24% during the quarter, highlighting the success of product expansion initiatives [19] Market Data and Key Metrics Changes - The U.S. faces a growing disparity between water supply and demand, necessitating significant investments in water infrastructure [9][12] - The Infrastructure Investment & Jobs Act is expected to provide critical funding for water system improvements, with bipartisan support anticipated [12] - Municipal repair and replacement activity remains resilient, with an increase in new project starts observed [15] Company Strategy and Development Direction - Core & Main aims to leverage its extensive product and service portfolio to meet the growing demand for infrastructure upgrades [13] - The company plans to continue its disciplined approach to M&A, having completed five acquisitions during and after the quarter [23][28] - The focus remains on organic growth through geographic expansion and enhancing the private label portfolio [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the stability of end markets and the positive trajectory of municipal projects funded by the Infrastructure Investment & Jobs Act [60][61] - The company raised its full-year estimates for net sales and adjusted EBITDA, expecting net sales to range from $7.35 billion to $7.45 billion [49] - Management anticipates continued organic growth of 2 to 4 points above market growth through execution of expansion initiatives [51] Other Important Information - The company generated robust operating cash flow of $260 million during the quarter, reflecting over 90% conversion from adjusted EBITDA [46] - Core & Main maintains a strong pipeline of acquisition opportunities and expects to remain acquisitive moving forward [53] - Approximately $379 million remains under the existing share repurchase authorization, with $100 million deployed for share repurchases in Q3 [48][24] Q&A Session Summary Question: Insights on municipal end market expectations - Management noted stable and modest growth in the municipal end market, with IIJA funds becoming more prominent and projects moving from planning to execution [60][61] Question: Breakdown of guidance raise - The guidance raise was primarily driven by recent acquisitions, a better-than-expected quarter, and optimism about end markets [68] Question: Factors affecting growth and margin enhancement for 2025 - Management expects a more typical year for 2025, with slightly positive end market volumes and a commitment to margin enhancement [75] Question: Impact of labor conditions and tariffs - Management indicated minimal impact from labor changes and noted that less than 15% of products are imported, viewing tariffs as neutral to positive [79] Question: Drivers of upside in Q3 performance - The quarter exceeded expectations due to improved construction cycles and the release of deferred projects from Q2 [88] Question: Pricing environment outlook for 2025 - Management anticipates a neutral pricing environment for 2025, with no significant contributors expected to impact pricing [90] Question: Contribution of water treatment initiatives to growth - Management highlighted long-term investments in water treatment capabilities, expecting continued growth in this area [104] Question: Ranking of factors behind gross margin improvement - Strategic sourcing and optimization were the primary drivers of gross margin improvement, with private label contributing as well [111] Question: Allocation of IIJA funding - Approximately one-third of the $55 billion IIJA funding for water has been allocated, with expectations for continued momentum in project bidding [125] Question: Opportunities from recent acquisitions - Recent acquisitions in utility servicing and damage prevention equipment are expected to complement existing offerings and add value for municipal customers [128]

Fiscal 2024 Third Quarter Results DECEMBER 3, 2024 CAUTIONARY STATEMENTS Cautionary Note Regarding Forward-Looking Statements This presentation and accompanying discussion may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, all statements other than statements of historical or current facts relating to our intentions, beliefs, assumptions or current expectations concerning, among other th ...

分组1 - Core & Main reported quarterly earnings of $0.69 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and showing an increase from $0.65 per share a year ago, resulting in an earnings surprise of 6.15% [1] - The company achieved revenues of $2.04 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 1.86%, and up from $1.83 billion in the same quarter last year [2] - Core & Main's stock has increased approximately 19.5% since the beginning of the year, while the S&P 500 has gained 26.8% [3] 分组2 - The earnings outlook for Core & Main is mixed, with the current consensus EPS estimate for the upcoming quarter at $0.33 on revenues of $1.61 billion, and $2.10 on revenues of $7.32 billion for the current fiscal year [7] - The Zacks Industry Rank for Manufacturing - Tools & Related Products is in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Core & Main has surpassed consensus EPS estimates only once in the last four quarters, indicating variability in earnings performance [2]