By any reasonable standards, MSC Industrial (MSM) had a fine quarter. Unfortunately, valuation and expectations have climbed to a level where the standards aren't necessarily reasonable, and shareholders may have to buckle up and prepare for more volatile performance in the stock.
Growth Continues, But Where's The Leverage?
The manufacturing sector of the U.S. economy continues to rebound and grow, and that's showing up in MSC's revenue. Revenue grew more than 16% this quarter and the company continues to post double-digit organic growth as well. While non-manufacturing sales picked up (up 9% this quarter versus 4% growth in the last quarter), manufacturing growth also remained strong at more than 19%. Website sales grew 26% this quarter and now make up about one-third of sales.
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MSC Industrial's Valuation Leaves No Room For Error
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