There is little to find fault with at Fastenal (FAST) from an operational perspective, and valuation is pretty binary – either you’re comfortable paying a hefty premium to buy/own a top-quality industrial supplier, or you’re not. That doesn’t mean that Fastenal is completely immune to larger cyclical concerns, as the shares have historically had a tougher time in periods where IP growth is slowing off recent peaks.
Fastenal shares are up a bit from my last update, outperforming MSC Industrial (MSM) and the broader industrial sector, but underperforming Grainger (GWW) and Applied Industrial (AIT). Little has changed with my basic thesis – I have no meaningful long-term operational concerns with Fastenal, but I remain concerned that the demanding valuation will make sustained outperformance more challenging in the future.
Read more here:
Fastenal Operationally Sound, But Cycle Pressures May Be More Challenging
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