MSA Safety Inc

MSA Safety Inc (MSA) provides mission-critical safety equipment, including fire-service gear, gas detection systems, and industrial protective products. The company benefits from recurring replacement demand, a strong brand reputation, and opportunities to drive steady earnings growth through product innovation, pricing, and margin expansion. This positions MSA well for continued success in the safety equipment market.

MSA Safety (MSA) represents a company where fundamentals have been solid, but valuations have drifted down to attractive levels as investors have focused on more ‘exciting’ areas of the market. This presents a compelling opportunity for long-term growth, as the company maintains a strong position in its sector despite the market's current focus elsewhere.

MSA Safety, Inc. is a leading manufacturer of premium workplace safety equipment, primarily serving government and commercial customers. The company has established itself as a top brand in workplace safety, benefiting from a growing focus on safety and a stable market. Despite a recent stock weakness due to anticipated growth slowdowns, we view this as an opportunity to purchase shares at an attractive price. MSA is in the early stages of a transition towards technology-enabled safety equipment, exemplified by their connected portable gas detectors, which have shown rapid revenue growth. We believe this cycle will lead to elevated 'catch-up' growth following the current slowdown.

During the second quarter of 2025, we initiated one new position in MSA Safety, Inc. (MSA) in the SMID Cap Composite. MSA’s core business provides critical safety solutions for workers across various industries, including construction, oil and gas, fire service, and general industry. MSA is a long-standing leader in firefighter safety equipment and is well known for their self-Contained-breathing-apparatus (SCBA). We believe that two of their markets are poised for growth over the next 5 years: Firefighter SCBAs should benefit from a wave of replacements, and MSA’s leading technology is superior to that of their biggest competitor, 3M. Additionally, customers in the portable gas detection market are adopting new “connected” technology, which could drive margins higher.

During the second quarter of 2025, we initiated a new position in MSA Safety (MSA). MSA’s core business provides critical safety solutions for workers across various industries, including construction, oil and gas, and fire service. They hold strong market positions driven by their reputation for quality and innovation. We believe that two of their markets are poised for growth: Firefighter SCBAs, which should benefit from a wave of replacements, and the portable gas detection market, which is shifting towards MSA’s connected technology. MSA's balance sheet is solid, and they have the potential to invest $1.5B in the next 5 years for M&A or stock buybacks. The stock is trading at the lowest EV/EBITDA multiple since 2017, making this an attractive entry point.