Core & Main: Investing In Growing Waterworks Consolidator Alongside Proven Private Equity Firm

Nov. 06, 2021 6:57 AM ETCore & Main, Inc. (CNM)
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Summary

  • Core & Main is one of two national players in the waterworks and fire protection product distribution oligopoly.
  • Investing alongside CD&R, a leading private equity firm with extensive experience in building materials and distribution businesses.
  • Drivers of shareholder value include the tailwinds of infrastructure spend, strategy to consolidate a fragmented sector, and implementation of operational best practices.
  • Core & Main is a lesser-known brand name and relatively under followed by investors, which creates the opportunity to accumulate shares before others jump on the bandwagon.
  • Main concerns are the current volatility in input prices and full valuation. I may initiate a toehold position and add to my position as the company demonstrates more progress.
Water Treatment Facility

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Thesis

This is an opportunity to invest in Core & Main (NYSE:CNM) - one of only two national waterworks and fire protection product distributors - alongside CD&R, a leading private equity firm with extensive expertise in building materials and distribution businesses.

This article was written by

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I strive to unearth less obvious, overlooked, or under-appreciated but intriguing and potentially profitable data-driven insights into companies of service to society.   I write to understand, identify deficiencies in, and share my thinking, and would be most appreciative if you call out blind spots, flaws, or gaps in my observations or reasoning. Hope you enjoy my contributions, but please do not take them as investment advice!

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CNM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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