From Cabot Wealth Advisory 5/16/13 Sign up for free Cabot Wealth Advisory
Combining value stocks with low P/BV ratios AND low volatility ratings is a good strategy. I used several criteria to locate the best possible choices: P/BV ratios less than 2.00; Beta less than 1.00; Value Line Financial Strength Ratings of B+ or better; low price-to-earnings (P/E) ratios; dividend yields of 1.0% or higher; and good earnings prospects for the next 12-month and five-year periods. One stock stands out.
Core-Mark Holding (CORE) Max Buy Price is 57.90; Min Sell Price is 72.25
Founded way back in 1888 and headquartered in San Francisco, Core-Mark is one of the largest broad-line, full-service wholesale distributors of packaged products to the convenience store industry in North America.
Core-Mark provides distribution and technology solutions and marketing programs to 30,000 retail stores throughout the U.S. and five Canadian provinces. Core-Mark provides services to traditional convenience retailers, grocers, mass merchandisers, drug, liquor and specialty stores, and other stores that carry consumer packaged goods.
Core-Mark reported disappointing first quarter results. Sales increased 2% and EPS dropped, but management provided an optimistic outlook for the remainder of 2013. I expect sales to advance 11% and EPS to soar 33% during the next 12 months ending 3/31/14. My conservative forecast is somewhat less optimistic than management’s forecast.
CORE shares are reasonably priced at 15.1 times my forward EPS (earnings per share) estimate of 3.75 and with a P/BV ratio of 1.62 when compared to similar wholesale/retail stocks. CORE’s Financial Strength Rating of B+ is adequate, and the Beta volatility index of 0.75 is exceptional. The company’s market cap is less than one billion (small cap), and the dividend yield is currently 1.3%. I expect CORE’s stock price to rise to my Min Sell Price of 72.25 within one year.
I will continue to follow Core-Mark Holding and other first-rate, high-quality companies in Cabot Benjamin Graham Value Investor. In my May Special Feature, my comprehensive analysis turned up five additional bargains with low P/BV ratios that are ready to rocket higher. I hope you will become a subscriber so that you can take advantage of the many bargains that I uncover every month!
Editor's Note: You can find additional dividend-paying stocks selling at bargain prices in the Cabot Benjamin Graham Value Investor. In every issue, you’ll find my legendary Maximum Buy and Minimum Sell Prices for over 250 stocks. Learn more.
|Core-Mark Holding Company (CORE)
395 Oyster Point Boulevard
South San Francisco, CA 94080
|Index Membership: N/A
Industry: Grocery Stores
Full Time Employees: 5,225