Fastenal’s CFO Bought About $100,000 In Stock

Page 1 of 2

Daniel Florness, the CFO of Fastenal Company (NASDAQ:FAST), purchased just over 2,600 shares of the company’s stock on December 5th at a average price of $41.50, according to a filing with the SEC. Florness now owns about 45,000 shares of the stock between his direct holdings and his 401k plan. Fastenal Company is a wholesaler and retailer of industrial and construction supplies including bolts, nuts, and screws.

Insiders should be reluctant to purchase shares in the company they work for because they already have a tight economic connection in the form of their income; they should prefer to diversify their wealth unless they are very confident in the future. This is one reason why studies show that stocks bought by insiders tend to outperform the market (read more about studies on insider trading). Our database of insider trading filings shows that Florness had bought a small number of shares in May at a slightly higher price than where the company is currently trading (see a history of his insider purchases). However, our records also show a smaller (1,000 share) buy by another insider in November. Consensus insider buying is a particularly bullish signal and so we think that it is useful to look more closely at the company.

SAC CAPITAL ADVISORS

In the third quarter of the year, Fastenal Company reported a 10% increase in revenue compared to the same period in 2011. With costs held in check, earnings grew 13% bringing the growth rate of net income in the first nine months of 2012 down to 19%. That is decent business performance, but at a market capitalization of $12.5 billion, Fastenal trades at 31 times trailing earnings. We like that the company has been growing, but it would need to continue its current growth rates for quite some time in order to justify that valuation. Even in terms of consensus 2013 earnings, the P/E multiple is 26.

We also track hedge fund activity, and while limited there were some managers buying into the stock last quarter. Billionaire Steve Cohen’s SAC Capital Advisors initiated a position of 1 million shares in Fastenal during the third quarter of 2012 (check out Cohen’s favorite stocks). Conatus Capital Management, which has $2 billion under management despite only being founded in 2008, also took on a position in the stock. Conatus is managed by David Stemerman, who had previously worked at Lone Pine Capital.  See more of Stemerman’s stock picks.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!