It's generally a good idea to keep up with the bear story on your holdings, if only to formulate a list of red flags to watch for or potentially under-appreciated aspects of the story that may drive the shares higher. In the case of MSC Industrial (MSM), there has been a fairly constant skepticism about the reproducibility of the company's growth – sure, they've grown this far, but they will find it increasingly difficult to go further. And yet, the company keeps doing precisely that.
Rebounding Manufacturing Showing Up In Higher Sales
Whether you want to look at rail traffic data or dive into the particulars of the Institute of Supply Management's regular reports, it is clear that manufacturing has been rebounding in the United States. That is good for an industrial supplier like MSC Industrial. Better still, that rebound seems to be broadening out and spreading into the small/medium-sized business sector – a key market for the company.
With that backdrop, the company favorably surprised the Street with 22% revenue growth in the fiscal second quarter. At $483 million, revenue surpassed even the highest published analyst estimate.
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MSC Industrial Direct Continues to Ride The Recovery
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