Fastenal CompanyFAST

Morningstar Rating

Stock Research and Analysis

by Anil Daka

Industrial distributor Fastenal developed fastener sales into a highly profitable, multibillion-dollar business. Fastenal deploys its vast store footprint, efficient distribution network, strong management, and wide product range to generate returns Read more

Bulls Say

Fastenal has taken a lead in establishing customer relationships at 2,300 locations. Future entrants have an uphill task.

Some of Fastenal's local competitors will reduce inventory to shore up liquidity in a credit-constrained market--further emphasizing Fastenal's strength.

Fastenal tracks profitability of every store to determine bonus payouts of store staff. A clear link between performance and payment motivates salespeople. Read more

Bears Say

Lack of geographical diversification will hurt Fastenal as U.S. industrial production shifts overseas.

Increasing consolidation in the industrial distribution space will intensify direct competition and reduce margins.

As Fastenal increases its store density, newer stores cannibalize sales of nearby older stores and reduce operating margins. Read more

Strategy

Fastenal's business strategy centers on reaching a wide customer audience efficiently. To this end, the firm maintains an extensive store network, operates a large fleet of feeder trucks, offers an unmatched Read more

Management

We believe Fastenal's management and board will act in the best interest of shareholders. In the past, the firm employed operating cash to invest in new stores that increased cash flows. Management later decided to slow new store additions, instead Read more

Profile

Fastenal provides customers with maintenance products, including 382,000 types of fasteners and 528,000 other general-purpose maintenance, repair, and operations items. Read more

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