Fact based stock research
MSC Industrial Direct (NYSE:MSM)

US5535301064

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

MSC Industrial Direct stock research in summary

mscdirect.com

ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), MSC Industrial Direct (Trading & Distribution, USA) shares have lower financial characteristics compared with similar stocks. Shares of MSC Industrial Direct are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on MSC Industrial Direct's financial characteristics. As the company MSC Industrial Direct's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 41), low growth (Obermatt Growth Rank of 17), and risky financing practices (Obermatt Safety Rank of 49), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	41
Growth Rank	17
Safety Rank	49
Combined Rank	21

Country	USA
Industry	Trading & Distribution
Index	Dividends USA, Water Tech, S&P MIDCAP
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: MSC Industrial Direct

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	51	53	69	41
GROWTH
GROWTH	33	5	47	17
SAFETY
SAFETY	53	71	53	49
SENTIMENT
SENTIMENT	n/a	6	46	^new
360° VIEW
360° VIEW	n/a	10	59	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 1-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better MSC Industrial Direct is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	51	53	69	41
GROWTH
GROWTH	33	5	47	17
SAFETY
SAFETY	53	71	53	49
COMBINED
COMBINED	46	24	56	21

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of MSC Industrial Direct the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), MSC Industrial Direct shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for MSC Industrial Direct. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 95% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 32 which means that the stock price compared with what market professionals expect for future profits is higher than 68% of comparable companies, indicating a low value concerning MSC Industrial Direct's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 25 which means that the stock price compared with what market professionals expect for future profit levels is higher than 75% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 37 is also low. Compared with invested capital, the stock price is higher than for 63% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on MSC Industrial Direct's stock price compared with the company's operational size and dividend yields. Should dividend investors pick MSC Industrial Direct? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose MSC Industrial Direct only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36	36	32	32
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	50	54	41	25
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	20	35	82	37
DIVIDEND YIELD
DIVIDEND YIELD	86	99	94	95
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	51	53	69	41

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of MSC Industrial Direct; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), MSC Industrial Direct shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for MSC Industrial Direct. While Sales Growth ranks at 58, professionals currently expect the company to grow more than 58% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 24, which means that, currently, professionals expect the company to grow its profits less than 76% of its competitors, and Capital Growth has a low rank of 33. Historic stock returns were also below average with a current Stock Returns rank of 23 which means that the stock returns have recently been below 77% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	22	25	42	58
PROFIT GROWTH
PROFIT GROWTH	17	34	52	24
CAPITAL GROWTH
CAPITAL GROWTH	n/a	10	41	33
STOCK RETURNS
STOCK RETURNS	68	25	53	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33	5	47	17

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of MSC Industrial Direct.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company MSC Industrial Direct has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of MSC Industrial Direct is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for MSC Industrial Direct. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 73, meaning the company generates more profit to service its debt than 73% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 28, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 72% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), MSC Industrial Direct has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for MSC Industrial Direct. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with MSC Industrial Direct and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	40	44	68	64
REFINANCING
REFINANCING	62	41	28	28
LIQUIDITY
LIQUIDITY	50	88	76	73
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	53	71	53	49

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of MSC Industrial Direct and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	44	32	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	8	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	88	96	^new
MARKET PULSE
MARKET PULSE	n/a	12	24	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	6	46	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for MSC Industrial Direct.
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