MSC Industrial: Increasingly Reliant On An Unproven Self-Help Story

Stephen Simpson20.88K FollowersFollow5ShareSavePlay(10min)CommentsSummaryMSC Industrial faces a still-challenging manufacturing environment, with recovery momentum uncertain and recent results highlighting volume weakness despite pricing gains.MSM’s Q2 saw weaker revenues and volumes, partially offset by better Q3 guidance and encouraging margin improvement from pricing and supply chain efficiencies.Future outperformance for MSM hinges on successful execution of self-help initiatives, yet persistent execution risk and unproven new management warrant caution.With shares near fair value (~$90), upside is limited; I may trim exposure as better opportunities arise, though MSM remains a leveraged play on U.S. manufacturing recovery. janiecbros/iStock via Getty Images The U.S. manufacturing economy remains challenging. While the last three ISM Manufacturing reports have been above 52 (indicating expansion), hiring isn’t expanding, cost pressures are significant, and a general note of caution persists. That makes for still-challenging conditions for industrial distributors likeThis article was written byStephen Simpson20.88K FollowersFollowStephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.