TRG | The Bottom Line – 8/27

As the debate continues for a federal Infrastructure bill, TRG initiated coverage this week on specialized water infrastructure company, Core & Main (NYSE: CNM). Core & Main is a company benefiting from several key secular trends, including the domino effects from a post-COVID population shift (driving residential, non-res and municipal demand) and growing environmental factors driven by climate change. As a leading specialized distributor of water, wastewater, storm drainage, and fire protection products and services, CNM maintains 14% market share in a fragmented market with the top two players accounting for ~30% market share. In addition to the distribution of highly specialized water infrastructure and fire protection products, critical to Core & Main’s story is value-added services, enabling the company the company to command superior margins, with additional upside as the company continues to grow its footprint and product offerings.