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
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 B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations 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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!