When I last reviewed W.W. Grainger (GWW) ("Grainger"), at a point only a month removed from peak COVID-19 panic, I called the stock a "borderline buy", as I was intrigued by the growth potential of new ventures like Zoro and MonotaRO, but still concerned about pricing/margin pressures and the details of the post-pandemic recovery. Since then, the shares have lagged the broader industrial space by about 10%, as well as rival MSC Industrial (MSM), lagged the S&P by a bit less, and kept pace with Fastenal (FAST).
I still am concerned about the long-term outlook for margins, particularly as the lower-margin "Endless Assortment" businesses ramp, but I believe the growth outlook is getting better, and Grainger may well give Fastenal a run for its money on long-term growth. Grainger is still not a clear-cut buy on the fundamentals, but it's becoming more and more appealing and better execution on margins could unlock a lot of upside.
To read the full article, click the link below:
Growth Opportunities Making W.W. Grainger's Story More And More Interesting
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