MSC Industrial Direct Co., Inc. (NYSE:MSM)

CAPS Rating: 5 out of 5

The Company and its subsidiaries are direct marketers of a range of industrial products to industrial customers throughout the United States, distributing a full line of industrial products for maintenance, repair and operations supplies requirements.

Recs

1
Player Avatar adlib5 (< 20) Submitted: 5/13/2008 11:29:32 AM : Underperform Start Price: $43.35 MSM Score: -64.11

These may become trying times for business who use this service, even if busuness is good WW grainger is the company in this business with a large moat as well as a lower P/E right now. Of course management could always have a plan. Its probably not a horrible investment although I do think its a little overpriced and I like Grainger better.

Member Avatar timattox (99.50) Submitted: 5/13/2008 5:33:36 PM
Recs: 0

But MSM has a better return on equity (28% vs 20%), profit margin (10.6% vs 6.6%), and return on assets (18.5% vs 13.9%) than GWW. The PE difference you mention is almost negligible, however, GWW does have a much better EV/OCF (15 vs 21).It looks like the two companies are actually fairly matched on the fundamentals. MSM has grown faster over the last 5 years, and since it is smaller, I suspect it can continue to grow faster than GWW. Though, now that I've looked at GWW, I may add it to my CAPS picks too. (CAPS isn't a zero sum game... unlike my real investments.)

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