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
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