As some early recovery stories have flattened out, MSC Industrial (MSM) shares haven’t done much in the last three months – they’ve outperformed other industrial distributors like Fastenal (FAST) and Grainger (GWW), and mostly kept pace with the S&P 500, but they have lagged the broader industrial space.
In the “buy the rumor, sell the news” world of Wall Street, it’s worth asking whether there will be enough momentum in the industrial recovery to keep driving positive sentiment here. While some analysts do seem to believe the U.S. is on the cusp of some sort of “super-cycle” recovery, that strikes me as a new version on the old “it’s different this time” theme.
Instead, I think the real key for MSC Industrial now is executing on what management has positioned as a transformative management restructuring (Mission Critical) meant to resolidify the company’s position in metalworking, expand into complementary adjacent markets, and drive better margins from a restructured expense base.
It sounds great in theory, but I’ve almost lost count of the number of management plans that were supposed to drive these benefits and didn’t, whether that was due to the plan being wrong or the execution being poor. Maybe we really are on the cusp of an unusually strong recovery cycle, and maybe MSC will get it right this time, but I’m not inclined to press my luck.
Read more here:
MSC Industrial's Markets Are Returning To Growth, But Follow-Through Is Essential
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