When I last wrote about Core-Mark (NASDAQ:CORE) almost a year and a half ago, I thought the shares seemed too richly valued
even though the company was executing pretty well and had a lot of
growth opportunities since then. I didn't necessarily expect the shares
to drop about 25%, and I certainly didn't expect the company to start
struggling to meet Street expectations for its earnings, but both have
happened, and Core-Mark finds itself in a position where it has to
rebuild its credibility.
Competitive
wins and losses are part of the business, but I'm a little disappointed
to see the higher expenses that Core-Mark has seen as it has shuffled
its deck of clients. With that, the uncertainty over the Rite-Aid (NYSE:RAD)
relationship looms a little larger. While 5% long-term revenue growth
and mid-teens FCF growth can support a fair value more than 10% above
today's level, the missteps over the past year or so need to lead to
some lasting changes (for the better) in how management monitors and
operates the business.
Read more here:
Core-Mark Needs To Start Hitting The Target Again
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