Sunday, July 13, 2014

Seeking Alpha: Expectations Versus Reality At MSC Industrial

When it comes to publicly traded companies, it's not enough to just operate to plan; even when companies don't necessarily set the expectations, they're still held accountable to them. MSC Industrial (MSM) did not do all that badly relative to management's guidance last quarter, nor relative to the plan management laid out for the fiscal year. That said, expectations had been increasing since the last quarter, and MSC Industrial couldn't meet those.

I think it's early to worry about competitive share loss to Amazon (AMZN), Grainger (GWW), and/or Fastenal (FAST). Likewise, management deserves more time to prove that its Barnes acquisition (now known as Class C Solutions Group, or CCSG) will add value. Still, two straight quarters of top line misses should not be ignored at this valuation. I'm content to continue holding these shares, but near-term performance may not be all that impressive.

Follow this link to the full article:
Expectations Versus Reality At MSC Industrial

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