Is Fastenal a good stock to buy? Earlier this week, J Michael Ancius, Director at Fastenal Company (NASDAQ:FAST) filed a Form 4 at the U.S. Securities and Exchange Commission declaring a purchase of 525 shares that he made last Friday, Oct. 11th. Out of them, 435 shares went to his direct holdings and an extra 90, to Ancius’ son (although Ancius himself states indirect ownership of them).
The company Director seems to have taken advantage of the substantial drop in the stock price that followed the dismal third quarter earnings report, released on Oct. 9th. Ancius paid $47.91 per share on Friday, and has already realized an upside of about 3%, given that the stock now trades at $48.05. Following the reported transactions, the insider directly holds 6,600*shares of common stock, valued at $317,130. In addition, he owns another 589 shares indirectly, through his son and a child custodian account.
While Ancius seems to bet on Fastenal, notwithstanding the latest earnings and revenue misses, analysts are not so confident. For instance, Allison Poliniak-Cusic, a Wells Fargo analyst, recently recommended staying away from the stock at the time. Actually, most analysts are trending toward a hold recommendation.
Nevertheless, about 26 of the hedge funds that we track hold a position at Fastenal. The largest “hedgie” bull by a wide margin is Timothy S. Peterson‘s Regiment Capital, which holds a $68,383,000 (approx.) stake in the company (this account for almost 20% of its equity portfolio). The other very large institutional supporter is Jim Simons‘ Renaissance Technologies, which holds $34,500,000 in stock.
|Operating Margin % TTM||21.8||7.9|
|Net Margin % TTM||13.6||4.6|
So, offering some of the best margins and returns (see table above) in the industry, while both insiders and hedge funds bet on its future performance, is this stock a buy?
The smart money sure thinks so.
*Includes 5780 shares jointly held with reporting person’s spouse in a revocable living trust and 820 shares held in the reporting person’s IRA.
Disclosure: Javier Hasse holds no position in any stocks mentioned