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MSC Industrial Direct Co Owner Earnings per Share (TTM)

: 3.57 (As of May. 2019)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

MSC Industrial Direct Co's owner earnings per share for the trailing twelve months (TTM) ended in May. 2019 was $3.57. It's Price-to-Owner-Earnings ratio for today is 19.75.


NYSE:MSM' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 6.23   Max: 51.5
Current: 19.75

6.23
51.5

During the past 13 years, the highest Price-to-Owner-Earnings ratio of MSC Industrial Direct Co was 51.50. The lowest was 6.23. And the median was 20.86.


NYSE:MSM's Price-to-Owner-Earnings is ranked lower than
63% of the 112 Companies
in the Industrial Distribution industry.

( Industry Median: 15.84 vs. NYSE:MSM: 19.75 )

MSC Industrial Direct Co's Earnings per Share (Diluted) for the three months ended in May. 2019 was $1.44. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in May. 2019 was $5.30. It's PE Ratio ratio for today is 13.30.

MSC Industrial Direct Co's EPS without NRI for the three months ended in May. 2019 was $1.44. Its EPS without NRI for the trailing twelve months (TTM) ended in May. 2019 was $5.30. It's PE Ratio without NRI ratio for today is 13.30.


MSC Industrial Direct Co Owner Earnings per Share (TTM) Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

MSC Industrial Direct Co Annual Data
Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.19 2.95 5.04 2.63 5.01

MSC Industrial Direct Co Quarterly Data
Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.71 5.01 4.97 4.00 3.57

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


MSC Industrial Direct Co Owner Earnings per Share (TTM) Distribution

* The bar in red indicates where MSC Industrial Direct Co's Owner Earnings per Share (TTM) falls into.



MSC Industrial Direct Co Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earning Per Share = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

MSC Industrial Direct Co's "Owner Earnings Per Share (TTM)" Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 295
Depreciation, Depletion and Amortization 65
Change In Deferred Tax 0
5Y Average of Maintenance Capital Expenditure 50
Change In Working Capital -112
Shares Outstanding (Diluted Average) 55

1. Start with "Net Income" from income statement. MSC Industrial Direct Co's Net Income for the trailing twelve months (TTM) ended in May. 2019 was $295 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. MSC Industrial Direct Co's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in May. 2019 was $65 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. MSC Industrial Direct Co's Change In Deferred Tax for the trailing twelve months (TTM) ended in May. 2019 was $0 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $50 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

MSC Industrial Direct Co's 5-Year Average Maintenance Capital Expenditure = $50 Mil

5. "Change In Working Capital" is from cashflow statement. MSC Industrial Direct Co's Change In Working Capital for the trailing twelve months (TTM) ended in May. 2019 was $-112 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. MSC Industrial Direct Co's Shares Outstanding (Diluted Average) for the months ended in May. 2019 was 55.387 Mil.

MSC Industrial Direct Co's Onwer Earnings Per Share for May. 2019 is calculated as:

Owner Earnings Per Share(TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 295.274 +64.56+0
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-50.0568881601+-112.099)/55.387
=3.57

Price-to-Owner-Earnings=Current Price/Owner Earnings Per Share (TTM)
=70.48/3.57
=19.75

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


MSC Industrial Direct Co Owner Earnings per Share (TTM) Related Terms


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