Despite strengthening economic conditions, shorter-cycle industrials haven’t really been performing all that well, and Fastenal (NASDAQ:FAST) has been no exception. This industrial distributor did a little better than expected in the second quarter, and continued to show progress on long-term business-building initiatives, but it wasn’t thesis-changing outperformance and investors seem ready to call it a day with earlier-cycle plays.
Modest year-to-date underperformance versus the S&P 500 and the broader industrial sector certainly has to be kept in context – over the long term Fastenal has been a great stock, and there’s nothing wrong with the business. Valuation remains problematic for me, though, and unless you expect significant beat-and-raise quarters in the near-future or are a more value-insensitive investor who believes in just buying quality and holding through thick and thin, I don’t see much appeal right now.
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Fastenal Seeing Better Results, But The Market Seems Less Interested In Short-Cycle Stories Now
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