Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on MSA Safety Incorporated (MSA) on Andvari’s Substack by Douglas OTT. In this article, we will summarize the bulls’ thesis on MSA. MSA Safety Incorporated (MSA)'s share was trading at $165.11 as of 6th June. MSA’s trailing P/E was 22.77 according to Yahoo Finance.
A worker in full safety gear is operating an excavator in a mining operation.
MSA Safety exemplifies the “picks-and-shovels” investment theme—providing essential tools and equipment rather than chasing the volatile end markets they serve. Founded in response to the deadly coal mining accidents of the early 20th century, MSA began by collaborating with Thomas Edison to develop the electric hard hat, a breakthrough in mine safety that led to a 75% reduction in explosions over the following decades.
Since then, the company has expanded its portfolio to include a wide array of life-saving products such as gas detection systems, firefighter helmets, breathing apparatuses, and fall protection gear—many of which are market leaders, highly engineered, and mandated by regulation. This combination gives MSA strong pricing power without alienating customers, as its equipment forms a small part of total costs but plays a critical role in risk mitigation.
Recently, MSA has evolved into a more software-centric business, with nearly half its engineers now focused on software development. This shift has embedded MSA more deeply into clients’ daily operations, offering real-time data and predictive analytics that improve safety and decision-making without increasing manufacturing costs. Complementing this organic evolution is a disciplined M&A strategy that has added valuable assets like Bacharach and BTQ, enhancing MSA’s positioning in adjacent safety markets.
Despite serving cyclical industries like oil, gas, and mining, MSA’s consistent focus on non-discretionary, mission-critical products has generated robust financial performance and an extraordinary 100x return since 1988. With durable competitive advantages and a growing software moat, MSA remains a compelling long-term compounder in industrial safety.
Previously, we highlighted a bullish thesis on the standout stock Copart (CPRT) by the same author. Despite record Q3 results, the stock dipped on slight margin pressure, by 6%, but its long-term compounding story based on its fortress balance sheet, Berkshire-like capital discipline, and dominant position in salvage vehicle auctions remains intact. The thesis on MSA Safety (MSA) offers a similar case for steady, disciplined growth, though through a more product-embedded, software-driven path
