Stock on Watch: MSC Industrial Direct Co. Inc. (MSM)

Company Profile:

MSC Industrial Direct Co., Inc. is direct marketers and distributors of a range of metalworking and maintenance, repair and operations (MRO) products to customers throughout the United States. The Company operates primarily in the United States, with customers in all 50 states, through a network of five customer fulfillment centers. Its products represent a range of MRO products that include cutting tools; measuring instruments; tooling components; metalworking products; fasteners; flat stock; raw materials; abrasives; machinery hand and power tools; safety and janitorial supplies; plumbing supplies; materials handling products; power transmission components and electrical supplies. The company was founded in 1941 and is headquartered in Melville, New York.

Recent News:

On Oct. 27, the company announced that its Board of Directors has declared a cash dividend of $0.45 per share, representing a 4.7% increase from $0.43 per share, in the regular quarterly dividend. The $0.45 dividend is payable on November 29, 2016 to shareholders of record at the close of business on November 15, 2016. The ex-dividend date is November 11, 2016.

For the quarter ended May 31, 2016, the company reported revenues of USD 727.50 million, Net Earnings of USD 64.57 million.Gross margins narrowed from 45.40% to 44.95% compared to the same period last year, operating (EBITDA) margins now 17.01% from 16.35%.

The Company’s conference call to review its 2016 fiscal fourth quarter and full year results, as well as its current operations, will be broadcast live over the Internet Tuesday, November 1, 2016 at 8:30 a.m. Eastern Time.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

MSM’s strengths can be seen in its strong profitability and robust efficiency compared with its peers. Its revenue has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator and RSI is increasing to 46.46 with positive bias. We rate MSC Industrial Direct Co. Inc. (MSM) a STRONG BUY.