Thursday, October 31, 2013

Seeking Alpha: MSC Industrial Comes Through In A Tough Quarter

Maybe the best shine I can put on MSC Industrial's (MSM) fiscal fourth quarter is that it was one of the better results in an industry that has disappointed investors due to a slowdown in manufacturing, the sequestration, and the stubborn lack of recovery in construction. While MSC's organic revenue growth was weaker than that reported by large rivals like Grainger (GWW) and Fastenal (FAST), at least some of that can be attributed to the company's greater focus on small manufacturing companies.

I'm not looking for 2014 to be a banner year for industrial distributors, but I believe MSC Industrial is still meaningfully undervalued. The company is definitely vulnerable to further slowing in manufacturing and more activity from Fastenal in areas like metalworking, but the market's worries about MSC Industrial's cyclicality (worries that are harder to dismiss given the company's relative performance) means that investors can still take advantage of an undervalued stock.

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MSC Industrial Comes Through In A Tough Quarter

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