MSC Industrial (NYSE:MSM) management appears to be making real progress on multiple self-improvement initiatives – something I’ve been skeptical/critical of for some time – but that progress is coming at a time when investors have become considerably more cautious about economically-sensitive names (and stocks in general). While the shares may not be benefiting in the short term from the company’s progress, and I do think cycle/economic risk is relevant, an improved long-term margin profile would certainly be a net positive.
MSC shares are down about 15% since my last update in April, slightly outperforming the average industrial stock, and the shares have likewise outperformed the industrial sector since I went positive in late February (outperforming by around 700bp); the shares have likewise modestly outperformed the S&P 500. Although I think there’s still more room for growth from the company’s industrial customer base, and a lot of bullishness has come out of the industrial space, I do think there are opportunities to shop around in the current market environment.
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MSC Industrial Logs Another Very Good Margin Result, But Cycle/Economy Fears Are Front And Center
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