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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Msc Industrial Direct Co., Inc. (XNYS:MSM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MSM
Name:
MSC INDUSTRIAL DIRECT CO., INC. (XNYS:MSM)
Sector:
42.54M
Industry:
Industrial Distribution
CEO:
Mr. Erik Gershwind
Total Employees:
6,571
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -145.72% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MSC INDUSTRIAL DIRECT CO., INC.(MSM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INDUSTRIAL DISTRIBUTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
78.58
One Month Price Target:
$79.02
Six Month Price Target :
$81.23
Likely Price in One Year's Time:
Ticker:
$83.87
Likely Trading Range Today Under (Normal Volatility)
$78.34
Price Upper limit ($) :
$78.86
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$75.48
This week:
$71.64
This month :
$64.71
Other Primary facts
Market Cap:
4.39B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
55.98M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.04%
-10.65%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$92.97
$86.38
$64.19
$70.78
Medium risk (<10%) entry points
Buy Call
Sell Call
$84.23
Buy Put:
Sell Put:
$82.82
$72.91
$74.34
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MSM
Sharpe Ratio:
1.06%
Comparison:
MSM, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -65.70% lower than the industry
& is -53.64% lower than the market/S&P 500 average
Average Returns/Yield of
MSM
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.59%
Yearly returns:
22.00%
Comparison of returns:
Average annual returns/yield (last 3 years) is -68.02% below industry average
Classification:
MSM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.68
Statistical test of Returns:
MSM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.94%
Weekly Volatility:
4.33%
Monthly Volatility:
8.66%
Yearly Volatility:
29.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.77%
Volatility in last five trading days has been -60.29% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.95%
Weekly VaR:
-8.83%
Monthly VaR:
-17.65%
How Much Can the price of
MSM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-61.15%
This translates to price declining to:
$66.58
This translates to price declining to:
$30.53
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
MSM is a 24.59% riskier investment compared to the market/S&P 500 & is 6.73% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -28.91% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MSM
Beta in relation to market/S&P 500--1.00
Expected beta in 1 year's time:
0.652
Expected beta in 3 year's time:
0.921
Unlevered (debt free) Beta:
0.725
Beta in relation to Nasdaq (XNAS):
0.476
Beta in relation to all global stocks::
0.515
Beta Comparison & Analysis
Beta of competitors/peers::
1.287
Beta is -22.09% lower than peers
Average Industry Beta:
1.265
Beta is -20.78% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.80%
Sustainable growth rate is -59.66% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.030
Alpha is -129.28% below industry average alpha yield
Alpha is -190% below the market average
Analysis of Cost of Capital of
MSM
Equity cost of capital:
0.100
Equity cost of capital is -15.24% below industry mean WACC
Unlevered (without debt) cost of capital:
7.25%
Before-tax cost of debt:
1.90%
After-tax cost of debt:
1.50%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.50%
WACC is -17.78% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$62.53
Revenue growth rate per share of (3Y):
3.69
Annual revenue growth rate is -83.77% below industry average
EPS:
$5.39
Expected Annual growth rate of EPS (3Y):
0.38%
Expected future EPS growth rate is -98.30% lower than the Industrial Distribution industry
Free cash flow (FCF) per share:
$2.86
Balance sheet equity growth per share: 192.33%
Equity growth rate per share is 793.43% higher than the industry
Debt per share
$10.70
EBITDA per share
$8.66
Valuation Analysis Today of
MSM
P/E Ratio:
14.6
P/E Ratio of Competitors/Peers:
13.98
P/E ratio is 4.38% higher than main peers & is -43.49% lower than the industry
Stock price/value with industry average P/E ratio: $139.21
MSM is -43.55% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.26
Price to sales ratio is -30.42% below the industry mean
P/B (Price to book value ratio):
3.69
Price to free cash flow: 27.43
Price to free cash flow ratio is -3.39% lower than the industry
Net income growth rate (3Y):
-33.38%
Net income growth rate is 61.67% higher than the average industry net income growth rate
Dividend Analysis
-
Dividend yeild: 3.82%
Previous Dividend: $0.75
Previous adjusted dividend: $0.75
Previous Dividend: $3.00
Expected next dividend best case: $1.44
Expected next dividend worst case: $0.06
Average dividend payment (long-term): $1.00
Average dividend increase/decrease (growth rate) % per period: 26.19%
Expected next dividend payment date: 25/07/2022
Expected next dividend record date: 07/11/2022
Expected next dividend declaration date: 20/06/2022
Previous dividend payment date: 26/04/2022
Previous dividend record date: 04/12/2022
Previous dividend declaration date: 22/03/2022
Dividend History:
2022-04-11--$0.75
2021-11-15--$0.75
2021-04-12--$0.75
2022-01-10--$0.75
2021-07-12--$0.75
2021-01-11--$0.75
Dividend growth rate is -303.00% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
50.62%
Net debt to equity ratio:
63.76%
Debt to assets ratio:
23.99%
Net debt to assets ratio:
30.21%
Debt-to-asset ratio is -44.61% below industry average
Ability to repay debt:
Interest coverage ratio:
31.28
Interest coverage ratio is -69.91% less than industry average
Looking forward:
Debt growth rate:
23.83%
Annual debt growth is 14% higher than industry average debt growth rate
Debt repayment rate in last quarter: 7.77%
Analysis of Key Statistics
Correlation of price movement with the market:
0.58
Statistical significance of correlation:
MSM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.554
Stock price is 4.77% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.554
Correlation of price movement with Nasdaq (^IXIC):
0.003
Covariance of price movement with the market:
0.004
Kurtosis
4.212
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.049
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MSM
Gross Profit Margin Ratio:
169%
Operating Profit Margin Ratio:
11.88%
Operating profit margin is 84.82% higher than the industry
Net Profit Margin Ratio:
169%
Effective Tax Rate:
24.52%
Effective tax rate is 22.96% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.50%
Return on equity (ROE) is -1.37% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.08%
Return on assets (ROA) is 22.00% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
2.3
Current ratio is -7.70% below industry average
Cash Conversion Cycle (days):
59.1
Cash conversion cycle is 85.60% above industry average
The remaining useful life of property plant & equipment is: 5.6 years
Stock based compensation to net income ratio:
1.89%
In-depth Efficiency Analysis
Revenue generated per employee:
532.7K
Each employee generates -6% less revenue than industry average revenue per employee
EBITDA generated per employee:
73.8K
Each employee generates 16% more EBITDA than industry average revenue per employee
Profit generated per employee:
45.9K
Each employee generates 17% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.5K
Each employee generates -5314% less free cash flow than industry average revenue per employee
Assets/Capital per employee
174.7K
Each employee generates -5314% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MSM
COLFAX UNT (XNYS:CFXA)
HERC HOLDINGS INC. (XNYS:HRI)
SCHNEIDER NATIONAL, INC. (XNYS:SNDR)
JOHN BEAN TECHNOLOGIES CORPORATION (XNYS:JBT)
GATES INDUSTRIAL CORPORATION PLC (XNYS:GTES)
MAXIMUS, INC. (XNYS:MMS)
BWX TECHNOLOGIES, INC. (XNYS:BWXT)
ATKORE INC (XNYS:ATKR)
NAMVIET JOINT - STOCK COMPANY (XSTC:NAV)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�54%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/28/22
Revenue:
3.50B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.02B
1.48B
-
-
-
-
1.05B
1.05B
71.00K
15.50M
69.70M
484.87M
415.95M
301.59M
400.09M
98.08M
301.59M
Statement of Cash Flow
Date:
Period:
17.41M
Differed Income Tax :
-
Stock Based Compensation :
5.69M
Change in Working Capital :
- 37713.00K
Accounts Receivables:
- 21805.00K
Other Working Capital:
762.13M
Other Non-Cash Items:
6.35M
Net Cash Provided by Operating Activities:
57.80M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
11/27/21
2022
Q1
62.88M
-
62.88M
578.65M
622.62M
84.26M
1.35B
351.80M
691.87M
98.42M
-
-
5.85M
1.15B
-
2.50B
177.82M
218.19M
-
-
190.27M
586.28M
598.77M
9.44M
717.04M
-
1.30B
57.00K
556.59M
- 22065.0K
648.18M
November 27, 2021 at 12:00:00 AM
3.07B
1.18B
2.49B
-
816.95M
754.1M
-
- 15262.00K
- 15262.00K
- 50418.00K
-
- 4559.00K
-
35.18M
- 19794.00K
- 409.00K
22.34M
62.88M
40.54M
57.80M
- 15262.00K
42.54M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MSM
2023
2024
2025
2026
2027
$91.07
$97.21
$103.76
$110.75
$118.20