Tuesday, December 22, 2015

Seeking Alpha: From Bad To Worse For MSC Industrial's Core Markets

I had my concerns about MSC Industrial (NYSE:MSM) back in the summer, as I was worried that ongoing weakness in U.S. manufacturing would make it harder for the company to achieve its margin leverage goals and grow revenue. That's proven to be the case, with monthly sales having turned negative and the shares losing another 22% or so in value from that last article.

I still believe that MSC Industrial is a good house in an increasingly sketchy neighborhood, and that's a tricky set-up for investors. Investors looking for more short-term punch (and/or who can't stand seeing near-term losses) should avoid these shares until there are real signs of strength in durable goods orders, ISM's purchasing managers' index, and other manufacturing metrics. More patient value-oriented investors may want to take a closer look, though, as there could be meaningful margin leverage and share gains pushing results (and the share price) higher over the long term.

Read more here:
From Bad To Worse For MSC Industrial's Core Markets

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