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Analysts May Have Underestimated This Stock

NEW YORK (TheStreet) -- As a person who doesn't mind surprises, it surprised me to learn that on Thursday a company I've never heard of is going to step into the earnings confessional and may surprise to the upside.

MSC Industrial Direct (MSM), together with its subsidiaries, operates as a direct marketer and distributor of various metalworking and maintenance, repair, and operations, or MRO, products primarily in the United States.

It offers nearly 600,000 stock-keeping units representing a range of MRO products, such as 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.

The company sells its products through its master catalogs, specialty and promotional catalogs, brochures and the Internet to small, medium, and large companies in various sectors including durable and non-durable goods manufacturing, education, government, and health care.

It's downright exciting to realize MSM is based right in the heart of what I call "the rebuilding gold mine of America," the region of the U.S. most impacted by Hurricane-Super Storm Sandy. MSC Industrial Direct was founded in 1941 and is headquartered in Melville, N.Y., with an additional office in Southfield, Mich.

Analysts have been underestimating companies like Alcoa (AA), so why shouldn't it be possible they've done the same to a company like MSM?

The stock has had a nice run-up after a nasty mid-year 2012 correction, as the chart below illustrates. The share price recovery has been especially encouraging to director David Sandler, who as of Dec. 27 owns 218,824 shares worth over $16,618,000. MSM's quarterly revenue-per-share growth is heading in the right direction as well. MSM ChartMSM data by YCharts

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