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Core & Main (CNM - Free Report) , a Zacks Rank #1 (Strong Buy), is an industrial distributor of wastewater, storm drainage, fire protection products, and related services. The company provides its products to municipalities, private water companies, and professional contractors.
CNM stock is benefitting from underlying momentum in the industrial sector and hit an all-time high earlier this month. Shares are displaying relative strength as buying pressure accumulates in this market leader.
The company is part of the Zacks Waste Removal Services industry group, which currently ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. This group is widely outperforming the market so far in 2024:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Based out of St. Louis, Core & Main serves the municipal, non-residential, and residential end markets in the United States. Its water portfolio includes various products such as pipes, valves, hydrants, and fittings. The company’s storm drainage offering is composed of corrugated piping systems, retention basins, and inline drains.
In addition, Core & Main’s fire protection products include sprinkler heads and devices, smart meters, and other accessories. The industrial giant also offers maintenance, installation, repair, replacement, and construction of wastewater, storm drainage, and fire protection infrastructure.
Earnings Trends and Future Estimates
Core & Main has established an impressive earnings history since its IPO in 2021. The company met or exceeded earnings estimates in three of the last four quarters, delivering a trailing four-quarter average earnings surprise of 1.46%. Consistently beating earnings estimates is a recipe for success.
Analysts covering CNM are in agreement and have been raising their earnings estimates lately. For the current fiscal year, analysts bumped up earnings estimates by 5.28% in the past 60 days. The Zacks Consensus Estimate now stands at $2.59/share, reflecting potential growth of 20.5% relative to the prior year. Revenues are projected to rise 12.6% to $7.54 billion.
Image Source: Zacks Investment Research
Let’s Get Technical
CNM shares have more than doubled in price over the last year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs and recently surpassed its former all-time high. With both strong fundamental and technical indicators, Core & Main is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Core & Main has recently witnessed positive revisions. As long as this trend remains intact (and CNM continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Core & Main is ranked favorably by our Zacks Style Scores, with a best-in-class ‘A’ rating in our Growth category and a ‘B’ rating in our Value category. This indicates that CNM stock is likely to continue to move higher based on a favorable combination of earnings and sales growth as well as relative undervaluation.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why Core & Main stock is a compelling investment. An appealing technical trend along with robust fundamentals paint a bullish picture moving forward.
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Bull of the Day: Core & Main (CNM)
Core & Main (CNM - Free Report) , a Zacks Rank #1 (Strong Buy), is an industrial distributor of wastewater, storm drainage, fire protection products, and related services. The company provides its products to municipalities, private water companies, and professional contractors.
CNM stock is benefitting from underlying momentum in the industrial sector and hit an all-time high earlier this month. Shares are displaying relative strength as buying pressure accumulates in this market leader.
The company is part of the Zacks Waste Removal Services industry group, which currently ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. This group is widely outperforming the market so far in 2024:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Based out of St. Louis, Core & Main serves the municipal, non-residential, and residential end markets in the United States. Its water portfolio includes various products such as pipes, valves, hydrants, and fittings. The company’s storm drainage offering is composed of corrugated piping systems, retention basins, and inline drains.
In addition, Core & Main’s fire protection products include sprinkler heads and devices, smart meters, and other accessories. The industrial giant also offers maintenance, installation, repair, replacement, and construction of wastewater, storm drainage, and fire protection infrastructure.
Earnings Trends and Future Estimates
Core & Main has established an impressive earnings history since its IPO in 2021. The company met or exceeded earnings estimates in three of the last four quarters, delivering a trailing four-quarter average earnings surprise of 1.46%. Consistently beating earnings estimates is a recipe for success.
Analysts covering CNM are in agreement and have been raising their earnings estimates lately. For the current fiscal year, analysts bumped up earnings estimates by 5.28% in the past 60 days. The Zacks Consensus Estimate now stands at $2.59/share, reflecting potential growth of 20.5% relative to the prior year. Revenues are projected to rise 12.6% to $7.54 billion.
Image Source: Zacks Investment Research
Let’s Get Technical
CNM shares have more than doubled in price over the last year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs and recently surpassed its former all-time high. With both strong fundamental and technical indicators, Core & Main is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Core & Main has recently witnessed positive revisions. As long as this trend remains intact (and CNM continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Core & Main is ranked favorably by our Zacks Style Scores, with a best-in-class ‘A’ rating in our Growth category and a ‘B’ rating in our Value category. This indicates that CNM stock is likely to continue to move higher based on a favorable combination of earnings and sales growth as well as relative undervaluation.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why Core & Main stock is a compelling investment. An appealing technical trend along with robust fundamentals paint a bullish picture moving forward.