Zacks Investment Research Lowers Fastenal (FAST) to Hold

Zacks Investment Research cut shares of Fastenal (NASDAQ:FAST) from a buy rating to a hold rating in a research note issued to investors on Tuesday morning.

According to Zacks, “Shares of Fastenal gained 15.2% in the last one year, compared with 39.8% growth of its industry. However, earnings estimates for 2018 have moved upward, reflecting analysts’ optimism. Increased onsite locations and installation of vending machines along with the Mansco acquisition are expected to boost sales. After a soft 2013, vending trends improved thereafter as management’s efforts to enhance the quality of signings/installs paid off. As of Sep 30, 2017, Fastenal operated 69,058 vending machines, up 14.3% year over year. Cost control initiatives are also impressive. However, unfavorable product mix, pricing and competitive pressures are hurting gross margins. Gross margin of 49.4% in the first nine months of 2017 dropped 10 bps from the prior-year quarter.”

Several other equities analysts have also weighed in on FAST. Morgan Stanley reissued an equal weight rating and issued a $46.00 target price (up previously from $44.00) on shares of Fastenal in a research note on Monday, October 2nd. BMO Capital Markets reissued a market perform rating and issued a $51.00 target price (up previously from $46.00) on shares of Fastenal in a research note on Tuesday, October 10th. Stephens set a $54.00 price target on Fastenal and gave the stock a buy rating in a research report on Wednesday, October 11th. KeyCorp reaffirmed a buy rating and set a $52.00 price target on shares of Fastenal in a research report on Thursday, October 12th. Finally, Stifel Nicolaus reaffirmed a hold rating and set a $51.00 price target on shares of Fastenal in a research report on Monday, December 11th. One research analyst has rated the stock with a sell rating, five have issued a hold rating, eight have issued a buy rating and two have assigned a strong buy rating to the stock. Fastenal presently has an average rating of Buy and an average target price of $53.29.

Fastenal (NASDAQ FAST) traded up $0.45 during trading hours on Tuesday, reaching $53.75. The company’s stock had a trading volume of 3,462,643 shares, compared to its average volume of 2,199,534. Fastenal has a 1 year low of $39.79 and a 1 year high of $56.15. The company has a quick ratio of 2.45, a current ratio of 5.51 and a debt-to-equity ratio of 0.20. The firm has a market capitalization of $15,325.76, a price-to-earnings ratio of 26.74, a price-to-earnings-growth ratio of 1.77 and a beta of 1.09.

Fastenal (NASDAQ:FAST) last released its earnings results on Wednesday, January 17th. The company reported $0.45 earnings per share for the quarter, meeting the consensus estimate of $0.45. Fastenal had a return on equity of 27.39% and a net margin of 13.18%. The firm had revenue of $1.09 billion for the quarter, compared to analyst estimates of $1.08 billion. During the same quarter in the prior year, the firm posted $0.40 earnings per share. The company’s quarterly revenue was up 14.8% on a year-over-year basis. sell-side analysts expect that Fastenal will post 2.16 EPS for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, February 27th. Stockholders of record on Wednesday, January 31st will be given a dividend of $0.37 per share. The ex-dividend date of this dividend is Tuesday, January 30th. This represents a $1.48 dividend on an annualized basis and a dividend yield of 2.75%. This is a positive change from Fastenal’s previous quarterly dividend of $0.32. Fastenal’s dividend payout ratio (DPR) is currently 63.68%.

In related news, insider Terry Modock Owen sold 30,000 shares of Fastenal stock in a transaction that occurred on Thursday, November 16th. The stock was sold at an average price of $48.02, for a total value of $1,440,600.00. The sale was disclosed in a document filed with the SEC, which is available at this link. Also, insider Gary A. Polipnick sold 2,634 shares of Fastenal stock in a transaction that occurred on Friday, December 15th. The shares were sold at an average price of $53.45, for a total value of $140,787.30. Following the completion of the sale, the insider now directly owns 59,323 shares in the company, valued at approximately $3,170,814.35. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 62,746 shares of company stock worth $3,061,819. 0.55% of the stock is currently owned by insiders.

A number of institutional investors have recently made changes to their positions in FAST. Commonwealth Bank of Australia raised its position in Fastenal by 44.9% in the 2nd quarter. Commonwealth Bank of Australia now owns 2,429 shares of the company’s stock valued at $104,000 after buying an additional 753 shares during the last quarter. Fuller & Thaler Asset Management Inc. acquired a new stake in Fastenal in the 3rd quarter valued at approximately $114,000. Cable Hill Partners LLC acquired a new stake in Fastenal in the 3rd quarter valued at approximately $126,000. Krilogy Financial LLC raised its position in Fastenal by 2.0% in the 2nd quarter. Krilogy Financial LLC now owns 3,530 shares of the company’s stock valued at $154,000 after buying an additional 70 shares during the last quarter. Finally, QS Investors LLC raised its position in Fastenal by 1.6% in the 2nd quarter. QS Investors LLC now owns 4,051 shares of the company’s stock valued at $176,000 after buying an additional 63 shares during the last quarter. 84.57% of the stock is currently owned by institutional investors and hedge funds.

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About Fastenal

Fastenal Company is engaged in wholesale distribution of industrial and construction supplies. The Company is engaged in fastener distribution, and non-fastener maintenance and supply business. As of December 31, 2016, it distributed these supplies through a network of approximately 2,500 stores. Its customers are in the manufacturing and non-residential construction markets.

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