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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!