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Fastenal--A Big Long-term Winner Under The Investor Radar
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Fastenal--A Big Long-term Winner Under The Investor Radar

Apr 13 2014, 6:52pm CDT | by

Momentum investors busy chasing after high-flying Internet and biotechnology stocks have probably missed Fastenal  Company, a wholesaler and retailer of industrial and construction materials like...

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15 weeks ago

Fastenal--A Big Long-term Winner Under The Investor Radar

Apr 13 2014, 6:52pm CDT | by

Momentum investors busy chasing after high-flying Internet and biotechnology stocks have probably missed Fastenal  Company, a wholesaler and retailer of industrial and construction materials like screws, bolts, and fasteners in the US and overseas. The company’s stock has been a big winner—beating both the S&P500 and the Nasdaq Indexes by a wide margin over a 30-year period.

Last week, the company reported adjusted earnings of 38 cents per share in Q1 of 2014, beating the Zacks Consensus Estimate and year-ago earnings of 37 cents by a penny.

Net sales of $876.5 million in the first quarter of 2014 are up 8.7% year over the year, exceeding the Zacks Consensus Estimate of $870 million by a marginal 0.8%.

What is the secret of Fastenal’s outstanding performance? In the short-term, Fastenal has benefited from a rebound in the construction sector.

Long-term, Fastenal is a typical case of a company with multiple advantages.

One of its advantages is scale, the savings associated with a larger production size. Fastenal  has 2,600+ store locations in the US and Mexico.

Another advantage is scope, the savings associated with the offering for sale of different products by a single corporation rather than by different corporations. Fastenal sells hundreds of thousands of MRO, construction and OEM products that extend to 15 product lines.

A third advantage is customization, the offering of customer-tailored solutions. Fastenal’s manufacturing facilities cater products to different customer needs.

A fourth advantage is bundling, the packaging of different product characteristics to produce unique consumer offerings. Fastenal’s extensive store network and highly trained personnel allows the company to bundle products with services; and avoid commoditization.

And a fifth advantage is aggregation, the benefits associated with pulling a large number of orders together. Fastenal helps its customers cut their transaction costs by offering them a one-stop solution to their hardware needs.

Supporting Fastenal’s multiple advantages is the integration of its supply chain activities, creating a formidable barrier to entry for new competitors. The company owns manufacturing facilities, a transportation fleet, distribution centers, inventory supply systems, and retailing and sales service facilities.

The bottom line: What makes a company a long-term winner isn’t investor hype, but company fundamentals. Most notably the ability to raise barriers to entry to its markets; and Fastenal has plenty.

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat wa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by r ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin H ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states la ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 m ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Ministe ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involv ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Baz ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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