Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Core-Mark: A Great Small-Cap Play On Convenience

The convenience store (or "C-store") industry represents nearly $225 billion in in-store retail sales every year in the U.S. and Canada, and every one of those 175,000 or so stores needs distributors to deliver the goods they stock on their shelves. Core-Mark Holdings (NASDAQ:CORE), the second-largest C-store distributor, continues to offer some attractive leverage to this market. Up about 18% from my prior write-up, the valuation isn't quite as compelling, but I believe Core-Mark can continue to be a share-gainer in a fragmented market, while leveraging the margin and cash flow benefits of providing value-added services to smaller clients.

A Quick Review

I went over the basics of Core-Mark's business model in that December piece, but I'll...

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