Are Smart Investors Making the Right Decision? Fastenal Company (FAST)

Fastenal Company (NASDAQ: FAST) stock jumped 0.91% on Friday to $52.29 against a previous-day closing price of $51.82. With 2.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.4 million shares. During the session, the Industrial Distribution company that operates in wider Industrials sector, reached to the highest price of $52.59 whereas the lowest price it dropped to was $52.07. The 52-week range on FAST shows that it touched its highest point at $64.75 and its lowest point at $45.68 during that stretch. It currently has a 1-year price target of $48.43. With its current market cap of 28.25 billion, FAST has annualized dividend of $1.24 while the current yield stands at 2.37%. Beta for the stock currently stands at 1.21.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of FAST was up-trending over the past week, with a rise of 4.79%, but this was up by 3.71% over a month. Three-month performance dropped to -8.66% while six-month performance fell -8.68%. The stock lost -5.44% in the past year, while it has lost -18.37% so far this year. A look at the trailing 12-month EPS for FAST yields 1.79 with Next year EPS estimates of 1.95. For the next quarter, that number is 0.48. This implies an EPS growth rate of 7.40% for this year and 4.62% for next year. EPS is expected to grow by 6.33% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 13.20%.

Float and Shares Shorts:

At present, 575.46 million FAST shares are outstanding with a float of 573.62 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.85 million, which was 2.06% higher than short shares on Jun 14, 2022. In addition to Mr. Daniel L. Florness as the firm’s Pres, CEO & Director, Mr. Holden Lewis serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 78.40% of FAST’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.42% of FAST, in contrast to 41.68% held by mutual funds. Shares owned by individuals account for 37.19%. As the largest shareholder in FAST with 11.50% of the stake, The Vanguard Group, Inc. holds 66,182,725 shares worth 66,182,725. A second-largest stockholder of FAST, BlackRock Fund Advisors, holds 31,209,630 shares, controlling over 5.42% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in FAST, holding 27,299,509 shares or 4.74% stake. With a 2.95% stake in FAST, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 16,963,707 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.30% of FAST stock, is the second-largest Mutual Fund holder. It holds 13,251,667 shares valued at 661.52 million. Vanguard 500 Index Fund holds 2.21% of the stake in FAST, owning 12,741,563 shares worth 636.06 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, FAST reported revenue of $1.78B and operating income of $383.40M. Over the past year, revenue came in at $6.57B while operating income stood at $1.36B. It generated $287.10M net income for the quarter, which came to $1.03B over the last twelve months. The EBITDA in the recently reported quarter was $427.40M and diluted EPS was $0.50. EBITDA for the full year was $1.54B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for FAST since 14 analysts follow the stock currently. There are 1 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With FAST analysts setting a high price target of $60.00 and a low target of $42.00, the average target price over the next 12 months is $48.22. Based on these targets, FAST could surge 14.74% to reach the target high and fall by -19.68% to reach the target low. Reaching the average price target will result in a decline of -7.78% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. FAST will report FY 2022 earnings on 01/19/2023. Analysts have provided yearly estimates in a range of $1.89 being high and $1.83 being low. For FAST, this leads to a yearly average estimate of $1.86. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Fastenal Company surprised analysts by $0.00 when it reported $0.50 EPS against a consensus estimate of $0.50. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is $0.49 and the low estimate is $0.47. The average estimate for the next quarter is thus $0.48.

Dividends & Yield:

In terms of dividends, FAST has a current ratio of $1.24, which is $1.24 over the trailing 12-months, while a dividend of $0.91 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and FAST currently yields $2.31. In the past year, FAST’s dividend yield has been $2.31, but when looking at the stock over the past five years, its yield has been $2.38. Accordingly, FAST has a current buyback yield of $0.16. This was $0.16 for the TTM, and it was $0.25 for the past five years.

Summary of Insider Activity:

Insiders traded FAST stock several times over the past three months with 7 Buys and 0 Sells. In these transactions, 6,136 shares were bought while 0 shares were sold. The number of buy transactions has increased to 45 while that of sell transactions has risen to 22 over the past year. The total number of shares bought during that period was 430,284 while 332,587 shares were sold.

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