After hours: 4:11PM EDT
|Bid||30.52 x 800|
|Ask||30.99 x 4000|
|Day's Range||30.67 - 31.02|
|52 Week Range||24.00 - 35.94|
|Beta (3Y Monthly)||1.62|
|PE Ratio (TTM)||23.14|
|Earnings Date||Oct 8, 2019 - Oct 14, 2019|
|Forward Dividend & Yield||0.88 (2.87%)|
|1y Target Est||32.38|
Here comes the trade war, and that isn't good news for Fastenal (NASDAQ:FAST) which dropped nearly 4% on news that U.S. President Donald Trump will impose a 10% tariff on $300 billion worth of Chinese goods at the start of September. Don't count Fastenal stock out just yet, though.The logic here is simple enough. Fastenal is the world's largest fastener distributor in North America. As the largest fastener distributor in North America, Fastenal sells heavily to North American industrial and manufacturing companies. They also source a ton of product from Asia, particularly China. Consequently, the company has been hit hard by a double headwind of slowing demand and rising costs amid escalating trade tensions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRevenue growth has slowed. Margins have compressed. Profits have fallen flat. FAST stock has dropped, falling close to bear market territory (almost 20% off recent highs), while the S&P 500 is just 3% off its all-time highs. * 8 of the Most Shorted Stocks in the Markets Right Now This new round of tariffs is more bad news for FAST stock. It's basically confirmation that things won't get much better anytime soon, and that Fastenal stock will likely remain depressed for the foreseeable future.But, this trade war isn't a permanent thing. Eventually, it will stop. Nobody really knows when. But, it will, because the global economy is so connected that neither side can fight with the other forever. Once the trade war does get resolved, Fastenal's headwinds will disappear. Revenue growth will pace higher. Margins will rise. Profits will rebound.So will FAST stock.As such, patience will be rewarded here. FAST sock won't turn things around right away. But, in a multi-year window, this stock does have tremendous upside in the likely scenario that a trade resolution is struck within the next few years. Fastenal Stock Won't Turnaround Just YetThe first important thing to note about Fastenal stock is that it's depressed for a reason (the trade war) and that reason isn't going away anytime soon.There are two things here: supply and demand. On the supply side, Fastenal sources a ton of product from Asia, particularly China, so as Trump has continued to impose more and more tariffs on Chinese imports, it has resulted in rising costs for a healthy portion of Fastenal's products.Fastenal has tried to hike prices to offset these rising costs. But, such efforts have fallen short thus far. Consequently, gross margins are getting squeezed. Last quarter, Fastenal reported nearly 200 basis points of year-over-year gross margin compression.On the demand side, Fastenal sells a ton of product to North American manufacturing and industrial companies. Those companies are being hit hard by the trade war. Because prices are going up, business operations are being disrupted, and everyone in the industry is uncertain about what's going to happen next.The result is, capex and investment levels are dropping. Indeed, by many metrics, U.S. manufacturing activity has plunged in 2019 to a nine-year low.As U.S. manufacturing activity has slowed, so has demand for Fastenal's products. Daily sales growth, the important revenue metric for this business, was 8%. It was the first sub-10% reading since the first quarter of 2017.Overall, then, the trade war is creating a huge drag on Fastenal's business. That drag isn't going away anytime soon. So long as it remains, FAST stock will remain depressed. Huge Upside Potential, EventuallyThe second important thing to note about Fastenal stock is that near term weakness isn't here to stay forever, and it's ultimately creating a compelling long term buying opportunity.Zooming out, the big picture fundamentals here are very good. Since 2010, U.S. manufacturing sales have grown at a ~2.5% compounded annual growth rate. Fastenal, due to its expansion and growth drivers, has significantly outpaced the industry, growing revenues at a 10%-plus compounded annual growth rate since 2010.This outperformance persists today, even in a time of turbulence. U.S. manufacturing sales have fallen flat in 2019. Fastenal reported first-quarter sales growth of 12% and second-quarter sales growth of 8%. That's impressive.Thus, Fastenal is a winning company in a long-term stable industry that's going through a rough patch right now. But, this rough patch won't last forever. Because their two economies are so connected and dependent upon one another, the U.S. and China are unlikely to fight on trade forever.Instead, Trump will keep upping the ante, China will be forced into a position to make a more meaningful deal, and a resolution will likely be reached within the next few quarters or years.Once that resolution is reached, FAST stock should jump.The math here is easy to follow. Even accounting for the trade war, Fastenal still projects as a mid-single-digit revenue grower over the next several years. Gross margins should rebound as Fastenal more consistently and optimally leverages price hikes to offset rising costs. The opex rate should keep falling since management sounded a big cost savings tone on the last call.Putting all that together, profit growth should run around 10% over the next several years. That puts 2025 EPS at around $2.50. Based on a historically average 20-times forward multiple, that implies a 2024 price target of $50. Discounted back by 7% per year (3 points below 10% to account for the yield), which equates to a 2019 price target of ~$35. Bottom Line on Fastenal StockAccording to the long term fundamentals, FAST stock is materially undervalued at the current moment. But, this undervaluation promises to hang around so long as the trade war persists. As such, patience is key here, and it will ultimately be rewarded long term once trade disputes fade into the rear-view mirror.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Most Shorted Stocks in the Markets Right Now * 7 Charts That Should Concern Marijuana Stock Investors * 8 Monthly Dividend Stocks to Buy for Consistent Income The post Once the Trade War Ends, Patience with Fastenal Stock Will Be Rewarded appeared first on InvestorPlace.
It hasn't been the best quarter for Fastenal Company (NASDAQ:FAST) shareholders, since the share price has fallen 16...
Investment company Steginsky Capital Llc (Current Portfolio) buys Fastenal Co during the 3-months ended 2019Q2, according to the most recent filings of the investment company, Steginsky Capital Llc. Continue reading...
Waukesha, WI, based Investment company Provident Trust Co (Current Portfolio) buys Fastenal Co, sells Apple Inc during the 3-months ended 2019Q2, according to the most recent filings of the investment company, Provident Trust Co. Continue reading...
The construction sector looks weak, given moderating U.S. economic growth and declining spending. However, lower mortgage rates and solid job market raise hopes.
(Bloomberg Opinion) -- Good news comes with baggage for industrial companies this earnings season. United Technologies Corp., Stanley Black & Decker Inc. and Sherwin-Williams Co. all reported better-than-expected second-quarter earnings per share on Tuesday, but each company also gave investors new data points to worry about.For United Technologies, it was the fact that its aerospace businesses seem to be the only thing driving its improved outlook for sales and earnings in 2019. New equipment orders dropped 12% at Carrier in the period and 6% at the Otis elevator division, echoing reports of damped enthusiasm from industrial distributor Fastenal Co. and indications of an overall stagnation in new U.S. factory orders in June from the Institute for Supply Management. Stanley and Sherwin-Williams both left their full-year adjusted profit guidance unchanged despite notable beats in the second quarter, suggesting a cautious outlook on the rest of the year. Indeed, Stanley modestly reduced its expectation for volume growth amid a weaker outlook for industrial and emerging markets. Sherwin-Williams now expects overall revenue to increase only as much as 4% in 2019, down from an April projection of as much as 7%. Both companies think they can make up ground via price increases, but such sales weakness is troubling because Stanley and Sherwin-Williams can also be good proxies for the housing market and consumer demand.Despite the mixed results, stocks of all three companies rose Tuesday. Sherwin-Williams hit a new high and was on track for its biggest gain since 2009, while Stanley saw its biggest intraday gain since December. This is partly a reflection of lowered expectations. Industrial companies within the S&P 500 command a price-earnings ratio of about 17.5, a 10% discount to the broader benchmark’s valuation of 19.5 times profit. The average discount over the past five years is closer to 4%. Stanley had been down nearly 2% in the year leading up to Tuesday’s earnings report, owing in part to margin pressure it flagged earlier in the year. United Technologies has missed out on a nearly 4% gain in the S&P 500 after announcing a merger with Raytheon Co. that’s roused pushback from activist investors Bill Ackman and Dan Loeb.Generally speaking, though, investors appear to be choosing to prioritize the good headlines over the bad. Pentair Plc rose as much as 5.1% on Tuesday, despite relying mostly on tax benefits to beat analysts' second-quarter earnings estimates and cutting its organic growth guidance for the year. The International Monetary Fund further reduced its global growth outlook on Tuesday, saying a projected pickup from 2019’s pace in 2020 is “precarious,” with the principal risk factors being the U.S.’s various trade battles and Brexit. But for now, industrial companies are drawing on every means they have to keep the boom going, whether that’s relying on the still-robust aerospace market, pushing through price increases and cost cuts, or simply wagering a Federal Reserve interest-rate cut will boost investment.The thing about price increases is they get much trickier to pass along if demand starts to wobble. Stanley is also feeling the pain from the U.S.-China trade war. It now expects a $390 million hit to 2019 earnings from tariffs, currency swings and rising commodity prices, up from $340 million previously. Come 2020, United Technologies’ Carrier and Otis units will be spun off as independent companies, freeing the company from any future underperformance. Currency swings wiped out the modest organic revenue gain at Carrier in the second quarter, leaving it with a 1% decline in overall sales for the first six months of the year, and United Technologies lowered its full-year sales and profit outlook for the division. The flip side of United Technologies’ breakup is that it will be more exposed to an eventual downturn in aerospace markets without those two divisions, something it hopes to offset by expanding its defense business through the Raytheon deal.This willingness to look past trouble spots will be put to the test later this week when Caterpillar Inc. and 3M Co. report.(Updates stock activity in the third and fourth paragraphs.)To contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The market started to follow through on Thursday's rebound effort, opening higher on Friday. When push came to shove as the closing bell for the week approached, however, traders panicked again. The S&P 500's loss of 0.62% left it at 2976.61 … the lowest close in nearly two weeks.Source: Shutterstock Advanced Micro Devices (NASDAQ:AMD) did the most net damage, losing 1.5% of its value, with investors taking Mizuho's profit-taking advice to heart. Snapchat parent Snap (NYSE:SNAP) logged the most noteworthy loss on Friday though, falling 3.6% as investors hesitate heading into its earnings report this week. The 170% rally since its late-2018 low suggests confidence, but leaves the stock subject to profit-taking no matter what its quarterly report looks like.At the other end of the spectrum, Boeing (NYSE:BA) flew 4.5% higher after the company announced plans to take a $4.9 billion charge related to its 737 debacle. Although bad news on the surface, the market may have been pricing in worse.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 High-Flying, Overvalued Stocks in Danger of Crashing As the new week's trading action gets started though, none of those names are top trading prospects. Rather, it's the stock charts of Southern Co. (NYSE:SO), PepsiCo (NASDAQ:PEP) and Fastenal (NASDAQ:FAST) that merit the closest looks. PepsiCo (PEP)A week and a half ago PepsiCo was put under the microscope, as it was putting pressure on what was quickly taking shape as an important support level. That floor ended up stopping the weakness before it got started. That recovery effort, however, faltered just as quickly when a familiar ceiling was revisited. Friday's tumble was the one that broke PEP stock out of that rut, for the worst. In fact, two key technical floors were shattered, opening the door to what could be a sizable selloff.The floor in question is, or was, $130.59, marked in yellow. PepsiCo was held up there a couple of times since late June. Friday's close failed to find support there. * Click to EnlargeAt the same time, the setback on Friday dragged PEP shares below the 50-day moving average line, plotted in purple. * Zooming out to the weekly timeframe puts the rally and subsequent rollover in perspective. The June stall took shape at a technical ceiling that has been in place since late 2015. * The weekly chart also indicates the stock's coming out of an overbought condition, none of which haven't resulted in some sort of pullback. Fastenal (FAST)With nothing more than a passing glance, it would be easy to chalk up the recent weakness from Fastenal to market-driven bearishness. And, perhaps that's all it is. Fastenal is inching dangerously close to a more significant breakdown though, and one more misstep could open the selling floodgates. * 7 Defense Stocks to Buy to Fortify Your Portfolio * Click to EnlargeThe good news is, the make-or-break levels are crystal clear, as is the most likely floor should the budding selloff manage to take root. * The support area to watch is right around $30. That's just below the white 200-day moving average is, and where May's low was. That area has also been resistance in recent months, making it more meaningful. * That said, FAST stock is putting pressure on that floor under pretty bearish circumstances. Last month, it met rather decided technical resistance at its purple 50-day moving average line (highlighted). * The current weakness appears to be an effort to drag Fastenal all the way back to a floor currently near $26, which tags all the major lows going back to the beginning of 2016. Southern Co. (SO)Southern Co. didn't end last week on a particularly high note. The stock fell 1.5% on Friday, peeling back on above average volume. Nevertheless, the bigger trend remains a bullish one. The support line that has been steering SO shares upward since February remains intact, and Southern Co. stock remains above its pivotal moving average, plotted in pink on the daily chart.The flavor and support for the rally is changing though, for the worst. It took a bump into a familiar resistance line to get the ball rolling, but SO is now in more trouble than it may seem to be on the surface. Click to Enlarge * The problematic ceiling is plotted in white on the weekly chart, though it has been made more problematic by the fact that it was bumped when the RSI indicator also reached an overbought condition. * Friday's bearish volume was above average, but not just more than the norm. It was the most daily distribution we've seen since April, hinting there are many would-be profit takers waiting in the wings. * While the deck may be stacked against Southern Co. shares here, the pivotal line is the purple 50-day moving average line currently at $54.95.As of this writing, James Brumley held a long position in Boeing. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post 3 Big Stock Charts for Monday: Southern Co., Fastenal and PepsiCo appeared first on InvestorPlace.
The largest Insider Buys this week were for Fastenal Co., HealthEquity Inc., Hyster-Yale Materials Handling Inc. and NGM Biopharmaceuticals Inc. Continue reading...
It looks like Fastenal Company (NASDAQ:FAST) is about to go ex-dividend in the next 3 days. Investors can purchase...
In early June, Fastenal announced a milestone after its active vending device count surpassed 100,000. The vending milestone has been quickly followed by another, this one pertaining to the company’s fast-growing Onsite program. The milestone Onsite is being set up within the Rocanville, Saskatchewan facility of Nutrien, the world’s largest provider of crop inputs, services, and solutions.
(Bloomberg Opinion) -- It may be a cliche, but it’s true that the stock market isn’t the economy. Values fluctuate based on a seemingly infinite number of variables, from the real (earnings) to the intangible (sentiment). So even though U.S. equities are near all-time highs, that isn’t necessarily a sign that all is well with corporate America.One sign that executives may not be all that confident in the outlook is the market for commercial paper. Even with a slight pullback the last two weeks, companies have been issuing these short-term corporate IOUs at pace not seen since 2011. The amount outstanding has jumped from $1.05 trillion at the start of the year to as much as $1.16 trillion earlier this month, according to the Federal Reserve. Although the amount eased back to $1.14 trillion in the latest weekly data that was released on Thursday, that’s still more than any time in the past eight years.Few markets are as opaque as the one for commercial paper, which typically matures anywhere from 15 days to nine months after it’s issued, and it’s never exactly clear why it expands or contracts. But it’s hard not to interpret this latest jump as a down-arrow for the economy. It’s a signal companies may not have the confidence to commit to long-term loans or issue bonds and instead want to wait out the uncertainty with shorter-term funding.Fed data on commercial and industrial loans back up that idea, with growth grinding to a halt in the second quarter, increasing by just 0.15% to $2.34 trillion. That’s the smallest increase since the end of 2017. The slowdown came even as the Fed’s most recent quarterly survey of senior loan officers showed that banks in aggregate eased some key terms for commercial and industrial loans to large and middle-market firms. So even though banks were willing to lend, companies had little appetite.“Manufacturing, trade and investment are weak all around the world,” Fed Chair Jerome Powell said last week in his semi-annual testimony to Congress.Recall that the Institute for Supply Management said on July 1 that its gauge of new orders for factories fell to 50, the lowest since December 2015 and equaling the dividing line between growth and contraction. And on Thursday, the Conference Board said its Leading Economic Index, which is intended to provide a sense of where the economy is headed, fell in June by the most since early 2016.And while it’s still early, the signals being sent by companies that have reported results so far this earnings season aren’t encouraging. Railroad operator CSX Corp. cut its revenue outlook for the year on Tuesday. Fastenal Co. and MSC Industrial Direct Co., which are – often viewed as an economic proxy because they sell factory-floor and construction site basics ranging from nuts and bolts to welding equipment – both noted a slowdown in demand in the most recent quarter.You can’t blame companies for being cautious. The U.S. is stuck in a trade war with China that seems to have no end, corporate earnings growth has stalled and the political divide in Washington is as great as ever. These aren’t things that can be fixed by a Fed interest-rate cut.To contact the author of this story: Robert Burgess at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The industrial supply companies' results had a lot to say about the outlook for the upcoming quarterly reports -- not all of it good.
This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll look at...
Fastenal Company (NASDAQ:FAST) reported its quarterly earnings results on Thursday, bringing in a profit and sales that were below what analysts called for, which sent the company's stock declining more than 2% today.The Winona, Minn.-based industrial supply business said that for its second quarter of its fiscal year, it amassed earnings of 36 cents per share, which was below its profit of 37 cents per share from the same period a year ago. This figure also missed the Wall Street consensus estimate of 36 cents per share.Fastenal Company's revenue for the period tallied up to $1.37 billion, which missed the Wall Street consensus estimate of $1.38 billion. It is also worth noting that the organization's sales growth was underwhelming, as it came in at 7.9% when compared to the year-ago quarter-this is the first three-month period in which sales have failed to gain at least 10% year-over-year in nine such periods.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis increase was caused in large part due to higher unit sales, which are linked to growth drivers. There were notable contributions from its industrial vending business, onsite locations and construction, among others. Fastenal's daily sales growth was also 7.9%, which missed the 12.2% and 13.1% gains from the first quarter of its 2019 and its year-ago quarter respectively.Daily sales gained 7% on a monthly basis in June, 9.5% in May and 12.5% in April, all below the same amounts in the company's year-ago months.FAST stock is down about 2.9% today. More From InvestorPlace * 7 A-Rated Stocks to Buy for the Rest of 2019 * 10 Best Stocks for 2019: A Volatile First Half * 7 Retail Stocks to Buy for the Second Half of 2019 * 10 Stocks to Sell for an Economic Slowdown The post Fastenal Company Earnings: FAST Stock Falls on Q2 Miss appeared first on InvestorPlace.