Friday, January 9, 2015

Seeking Alpha: MSC Industrial Continues To Skid

A couple of months ago, I expressed concerns over some potential red flags at industrial distributor MSC Industrial Direct (NYSE:MSM). Those flags are starting to wave more prominently now, and it is quite reasonable to ask whether management has a good enough plan in place to drive real synergy from the CCSG transaction and continue to gain profitable share in the industrial MRO market.

To be clear, I'm not saying it's all over for MSC Industrial. There is still substantial growth potential in its addressable market - from share gains and from expansion into new verticals and new product categories - but prior advantages like focuses on metalworking and e-commerce no longer serve the company as well as they once did. Management has some clear challenges in front of it; growth at CCSG must improve, synergies must emerge, and margins must improve. With another disappointing outlook on margins, though, investors can be forgiven if they opt for a "wait and see" approach with these shares.

Please follow this link for more:
MSC Industrial Continues To Skid

No comments: