10 Benjamin Graham Stocks for Defensive Investors

5. Fastenal Company (NASDAQ:FAST)

Number of Hedge Fund Holders: 35

Fastenal Company (NASDAQ:FAST), founded in 1967, began by supplying threaded fasteners through local branches. Over time, it expanded into a global business-to-business distributor of industrial and construction supplies, offering nine major product lines. As of 2024, Fastenal operated 3,628 in-market locations across 25 countries, supported by 15 distribution centers and 23,702 employees. Its customer engagement is driven by branches, Onsite locations, vending and bin stock technologies, and eBusiness, with a focus on reducing customers’ procurement costs.

In the first quarter of 2025, Fastenal Company (NASDAQ:FAST) reported a 3.5% year-over-year increase in net sales. This growth was attributed primarily to internal execution improvements, new customer acquisition, and expanding existing relationships, rather than broader market demand, which remains sluggish. Safety product sales rose nearly 10%, supported by strong performance in Fastenal Managed Inventory (FMI) and vending programs. Digital sales accounted for 61% of total revenue, up from 59% a year ago, with a target of 66–68% by October 2025. Fastenal raised its quarterly dividend from $0.43 to $0.44 per share, aiming to surpass $1 billion in dividend payouts for the year. Larger customer sites, particularly those spending over $10,000 monthly, grew by 7%, driven by high-performing Onsite locations. However, the company acknowledged ongoing underperformance in small customer segments, especially those spending under $2,000 per month, citing weaknesses in its e-commerce platform. Addressing these gaps remains the company’s key focus moving forward.

Fastenal Company (NASDAQ:FAST) recognizes the need to improve its e-commerce strategy, especially to capture more of the random MRO (maintenance, repair, and operations) spend that can slip through even in strong customer relationships. Some departments within client organizations may still find it easier to purchase from other vendors online. Strengthening its e-commerce platform would allow Fastenal to better serve these segments and consolidate spending under its offerings. A robust digital presence is also seen as critical to enhancing performance across all customer types, including smaller accounts where Fastenal currently underperforms.