I have been a shareholder of MSC Industrial (NYSE:MSM)
for a long time, and with that comes the risk of papering over problems
and telling myself "oh, it's not that bad" in the interest of holding
on to a position that has done pretty well for me. To be sure, I still
think that MSC Industrial has a lot of potential - I think the company's
combination of e-commerce, vending, catalog, and vendor-managed
inventory channels can drive meaningful share gains in what is still a
fragmented (but essential) industrial wholesaling market.
The
problem is that management's recent execution has not been sharp and the
company may be in the midst of a one-two punch of self-inflicted
disappointment and weakening core markets. I still believe that MSC
Industrial can outgrow the industrial MRO market and generate mid-single
digit revenue growth (and double-digit FCF growth), supporting a
low-to-mid $80's fair value. I also acknowledge, though, that this stock
may have further to fall before hitting bottom and investors looking
here for value today may want to think carefully about what the next few
quarters could look like.
Continue reading here:
MSC Industrial Suffering From Weakening Markets And Execution Issues
No comments:
Post a Comment