MSC Industrial Direct (MSM) Trading Down 5.3% on Disappointing Earnings

MSC Industrial Direct Co Inc (NYSE:MSM) traded down 5.3% on Thursday after the company announced weaker than expected quarterly earnings. The company traded as low as $91.15 and last traded at $92.53. 2,545,300 shares were traded during trading, an increase of 172% from the average session volume of 934,357 shares. The stock had previously closed at $97.70.

The industrial products company reported $1.05 earnings per share for the quarter, missing analysts’ consensus estimates of $1.06 by ($0.01). MSC Industrial Direct had a return on equity of 19.42% and a net margin of 8.01%. The business had revenue of $768.60 million for the quarter, compared to analysts’ expectations of $770.95 million. During the same period in the prior year, the company earned $0.95 EPS. The company’s revenue for the quarter was up 12.0% compared to the same quarter last year.

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, January 30th. Shareholders of record on Tuesday, January 16th will be paid a dividend of $0.58 per share. This represents a $2.32 dividend on an annualized basis and a dividend yield of 2.51%. The ex-dividend date of this dividend is Friday, January 12th. This is a positive change from MSC Industrial Direct’s previous quarterly dividend of $0.48. MSC Industrial Direct’s dividend payout ratio is currently 46.27%.

MSC Industrial Direct declared that its Board of Directors has authorized a share repurchase program on Wednesday, January 10th that allows the company to buyback 2,000,000 outstanding shares. This buyback authorization allows the industrial products company to buy shares of its stock through open market purchases. Shares buyback programs are often an indication that the company’s leadership believes its stock is undervalued.

A number of research analysts have weighed in on the company. Susquehanna Bancshares assumed coverage on MSC Industrial Direct in a research note on Monday, September 25th. They set a “neutral” rating and a $77.00 price target on the stock. KeyCorp reaffirmed a “hold” rating on shares of MSC Industrial Direct in a research report on Tuesday, October 17th. BMO Capital Markets reaffirmed a “market perform” rating and issued a $83.00 target price (up from $79.00) on shares of MSC Industrial Direct in a research report on Monday, October 9th. Gabelli raised MSC Industrial Direct from a “hold” rating to a “buy” rating and set a $94.00 target price on the stock in a research report on Friday, October 13th. Finally, Stephens set a $114.00 target price on MSC Industrial Direct and gave the stock a “buy” rating in a research report on Wednesday. Two investment analysts have rated the stock with a sell rating, eight have given a hold rating and seven have given a buy rating to the company. MSC Industrial Direct currently has an average rating of “Hold” and an average target price of $95.00.

In related news, Director Mitchell Jacobson sold 26,306 shares of the stock in a transaction on Tuesday, November 14th. The stock was sold at an average price of $79.40, for a total value of $2,088,696.40. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, EVP Steven N. Baruch sold 5,762 shares of the stock in a transaction on Monday, November 20th. The shares were sold at an average price of $81.25, for a total value of $468,162.50. The disclosure for this sale can be found here. Insiders sold a total of 225,541 shares of company stock worth $18,264,812 over the last ninety days. Corporate insiders own 31.38% of the company’s stock.

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Leith Wheeler Investment Counsel Ltd. increased its holdings in MSC Industrial Direct by 5.5% in the 4th quarter. Leith Wheeler Investment Counsel Ltd. now owns 22,407 shares of the industrial products company’s stock valued at $2,166,000 after purchasing an additional 1,160 shares in the last quarter. Public Employees Retirement System of Ohio increased its holdings in MSC Industrial Direct by 30.6% in the 3rd quarter. Public Employees Retirement System of Ohio now owns 372,507 shares of the industrial products company’s stock valued at $28,150,000 after purchasing an additional 87,188 shares in the last quarter. GSA Capital Partners LLP increased its holdings in MSC Industrial Direct by 37.4% in the 3rd quarter. GSA Capital Partners LLP now owns 13,182 shares of the industrial products company’s stock valued at $996,000 after purchasing an additional 3,589 shares in the last quarter. DF Dent & Co. Inc. increased its holdings in MSC Industrial Direct by 37.5% in the 3rd quarter. DF Dent & Co. Inc. now owns 4,407 shares of the industrial products company’s stock valued at $333,000 after purchasing an additional 1,203 shares in the last quarter. Finally, California Public Employees Retirement System increased its holdings in MSC Industrial Direct by 6.3% in the 3rd quarter. California Public Employees Retirement System now owns 141,409 shares of the industrial products company’s stock valued at $10,686,000 after purchasing an additional 8,409 shares in the last quarter. Hedge funds and other institutional investors own 75.55% of the company’s stock.

The stock has a market cap of $5,220.00, a price-to-earnings ratio of 22.30, a PEG ratio of 1.90 and a beta of 0.67. The company has a debt-to-equity ratio of 0.16, a quick ratio of 0.97 and a current ratio of 1.80.

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About MSC Industrial Direct

MSC Industrial Direct Co, Inc is a North American distributor of metalworking and maintenance, repair and operations (MRO) products and services. The Company’s range of MRO products 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.

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