Recent developments in the industrial distribution space haven't exactly dispelled the cliché that Grainger (GWW) is the dependable leader, MSC Industrial (MSM) the balanced growth story, and Fastenal (FAST) the real growth dynamo of this triad. Although Fastenal did indeed post solid results in the fourth quarter, investors may want to ask if it makes sense to pay so much for a levered growth play on U.S. industrial activity.
A Solid Fourth Quarter
Analysts expected quite a lot from Fastenal in the fourth quarter, and the company largely delivered. Revenue rose almost 22%, as the company saw excellent growth throughout the fourth quarter. Monthly sales rose 21% in December (on top of a nearly 21% jump in the prior year) and stores open more than two years saw roughly 18% same-store sales growth in the quarter.
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Fastenal Offers Remarkable Growth, But At A High Price
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