Insiders Were Offloading Shares of These 3 Companies This Week

Let’s wrap up our discussion by looking at the insider selling registered at MSC Industrial Direct Co Inc. (NYSE:MSM). Director Denis F. Kelly unloaded 1,422 Class A shares on Tuesday for $59.46 each, cutting his holding to 7,174 shares. The North American distributor of metalworking and maintenance, repair, and operations products and services has seen its stock decline by 21% over the past year. With 69% of the company’s revenue being generated from the manufacturing sector, MSC Industrial uses the Institute for Supply Management’s Purchasing Manager’s Index (PMI) as an indicator of its business activity. That Index totaled 48.2% for December 2015, indicating contraction in manufacturing for the second-straight month. The Metalworking Business Index, which tracks the economic activity of the metalworking industry in particular, equaled 43.2 in November 2015, marking the eighth-consecutive month of contraction in the industry. Nonetheless, several valuation metrics suggest that the company is relatively undervalued at the moment. For instance, the stock trades at a forward P/E of 14.67 and a trailing P/E of 15.70, which is below the 21.04 ratio of the S&P 500 Index. The hedge fund sentiment towards the stock was very positive in the September quarter as well, as the number of funds with positions in the company grew to 22 from 15 quarter-over-quarter. Allan Mecham and Ben Raybould’s Arlington Value Capital added a 1.21 million-share MSC Industrial position to its portfolio during the third quarter.

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