Sunday, April 12, 2015

Seeking Alpha: MSC Industrial Suffering From Weakening Markets And Execution Issues

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

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