Patience hasn't proved all that rewarding with MSC Industrial (MSM), as the shares have not only lagged peers like Grainger (GWW) and Fastenal (FAST) and suppliers like Kennametal (KMT)
but are basically flat for the past year. The debate continues as to
whether MSC Industrial's issues are predominantly driven by cyclical
factors, or whether increased online competition and the expansion of Amazon (AMZN) into industrial distribution has permanently altered price transparency and the competitive balance.
I
admit that I find it troubling that MSC reported only mid-single-digit
organic growth despite Gardner's Metalworking Index hitting its highest
level in seven years. A return to positive pricing was nice to see, as
was the operating leverage, but this remains a "show me" story where
valuation is not all that compelling.
Continue here:
MSC Industrial Still Looks A Little Underwhelming
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