MSA Safety A Solid Niche Business, But Valuation Is Puzzling

I like little niche businesses that have solid underlying growth drivers, relatively limited competition, and aren't widely followed. MSA Safety (NYSE:MSA) broadly qualifies, as it is a strong player in worker safety markets like self-contained breathing apparatuses, gas detection, head protection, and fall protection, and enjoys solid market share in many of these markets despite competing with the likes of 3M (NYSE:MMM) and Honeywell (NYSE:HON).

As far as growth drivers, ongoing product innovation can continue to drive sales growth in developed markets like the U.S., while emerging markets like China and Brazil begin to adopt more stringent standards for worker protection.

The "but" is valuation. I get that niche businesses will often trade at premiums, and I can understand how the market may be incorporating a premium to account for the possibility that a company like 3M would acquire MSA Safety. Even so, I just cannot connect the dots here on valuation enough to get bullish.

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MSA Safety A Solid Niche Business, But Valuation Is Puzzling