MSM

MSC Industrial($MSM) Director's $26M Buying Spree Pays Off 30%...Perfect Timing With Earnings Turnaround

11/21/2025 00:16

A compelling insider trading pattern has emerged at MSC Industrial Direct ($MSM), a mid-cap industrial distributor serving manufacturing companies with cutting tools, safety equipment, and maintenance supplies. The company competes with players like Fastenal and Grainger in the fragmented U.S. industrial distribution market. The standout development is Director Mitchell Jacobson's massive consecutive purchases totaling over $26 million. His first major buy came in April when shares hit rock bottom at $68-69, investing approximately $11.07 million. He followed up with additional purchases worth $15.3 million in late October and early November at $84-85 per share. This represents an extraordinarily large commitment for a mid-cap company director. Jacobson's timing appears strategically sound, coinciding with the company's earnings recovery trajectory. MSC Industrial struggled throughout 2024, with July quarter revenue declining 7.1% year-over-year to $979.35 million and October quarter revenue falling 8% to $952.28 million. EPS dropped from $1.74 to $1.33 and from $1.64 to $1.03 respectively. However, 2025 showed gradual improvement. January quarter revenue decline moderated to 2.7%, April saw a temporary setback with 4.7% decline, but July quarter narrowed the decline to just 0.8%. Most encouragingly, the latest October quarter finally returned to revenue growth. This progressive recovery validates Jacobson's contrarian buying at the lows. With shares now trading around $91, Jacobson's first purchase ($69 average) shows 30%+ gains while his second round ($84-85 average) is up 7-8%. His investment thesis has proven correct so far. Contrasting this bullish insider activity, CEO Erik Gershwind sold modest amounts in July and November, as did SVP Kimberly Shacklett in July. However, these sales were relatively small compared to Jacobson's purchases. Notably, Director Philip Peller switched from selling in July to buying in November, potentially following Jacobson's lead. Industry fundamentals are turning supportive. U.S. manufacturing PMI is recovering, and Fed rate cuts should gradually boost capital expenditure by manufacturing clients. MSC Industrial is positioned to benefit directly from this industrial recovery. Investors should monitor whether revenue growth acceleration continues alongside margin expansion. Industrial distribution benefits from operating leverage - when sales recover, profitability typically improves disproportionately. Conversely, if revenue growth stalls and returns to decline, even Jacobson's massive buying may not prevent share price weakness. Analyst consensus price target of $84 appears conservative given the insider confidence and earnings turnaround signals. However, the key test will be whether the manufacturing recovery sustains and drives consistent revenue growth in coming quarters.