Thursday, July 12, 2018

MSC Industrial Falls Short Again

In what has become an all-too-common pattern, industrial distributor MSC Industrial (MSM) missed the mark in its fiscal third quarter and issued disappointing guidance for the next quarter. This is quite disappointing for a company and stock that badly needs some beat-and-raise quarters to re-establish credibility with the Street, and the fact that the issues seem internal (in other words, strategic/management mistakes) is not going to help matters.

I do continue to believe that MSC Industrial has a good position in a segment of the industrial distribution market that should withstand competitive pressures from Amazon (AMZN) and other online/e-commerce distributors more effectively than many other distributors. I also believe the valuation now offers some upside, though management’s inability to execute on anything on a consistent basis is now a key concern.

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MSC Industrial Falls Short Again

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