Fastenal's Results Suggest Manufacturing Is Hanging In There

Extrapolating from Fastenal’s (FAST) results should always carry the caveat that Fastenal is an exceptionally well-run company, proven capable of gaining share in good times and bad, and not necessarily reflective of everyone’s experience. On the other hand, Fastenal’s results do provide a pretty good read on the pulse of sectors like manufacturing and non-residential construction, and in that respect the company’s first quarter results are at least a little encouraging.

There’s no mistaking that 2020 will be a tough year for manufacturing companies and the U.S. economy, and I expect Fastenal’s revenue to decline 6% while experiencing weaker margins. Still, Fastenal’s results may support the idea that manufacturing companies will hold up relatively better through this outbreak-induced recession. Specific to Fastenal and its stock, while I do believe in paying up for quality, I don’t see any particular bargain here and I’d note the shares have been outperforming the broader industrial space by a significant margin (close to 20%).

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Fastenal's Results Suggest Manufacturing Is Hanging In There