Below is a note from Hedgeye CEO Keith McCullough on why we're adding MSC Industrial (MSM) to Investing Ideas today:
"We have plenty of SELL ideas. I just don't like to be disrespectful of what Mr. Macro Market is telling me and be short everything before a big market ramp.
One of our latest Best Ideas (Institutional Research Product) on the bear side has been MSC Industrial (MSM). Here's an excerpt of Jay Van Sciver's recent research note about MSM's recently reported quarter:
Low Quality Quarter
We will leave it to others to summarize the MSM quarter, but the real ‘crime’ is that investors were willing to pay 27x earnings for a mature, family controlled business facing increasingly aggressive competition and Amazon’s competitive entry. In our February 21st Best Ideas Short addition and February 27th black book call, we highlighted high expectations, risks of pricing transparency, more adjacent competition, and temporary factors boosting estimates (e.g. Christmas/New Year’s on Sundays, roll-off of amortization item)."
