Fastenal Not Exactly Cheap As Tailwinds Start To Moderate

What inflation can give to industrial distributions like Fastenal (NASDAQ:FAST), pricing power namely, deflation can eventually take away, and that's a growing concern for industrial distributors as pricing is likely to become less of a benefit from here on. What's more, while underlying business activity and demand are still rather healthy, there is evidence that some of that strength is tapering off.

I'm not concerned about Fastenal from a long-term perspective; this is an uncommonly well-run company, and management's efforts to grow e-commerce, vending, vendor-managed inventory and the like will serve the company well in the coming years. That said, Fastenal still sports a premium multiple at a time when investors are increasingly skittish about industrial names, and I would be cautious about jumping in today - I do think a "buy the pullback" opportunity is forming, but I think it may be a little early to jump in today.

 

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Fastenal Not Exactly Cheap As Tailwinds Start To Moderate