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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