At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.
In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.
|Company||Symbol||Industry||Stock Rating||YTD% Gain||S.T.
||FAST||Trading Companies & Distributors||7.0||+6.21%||$49.77|
Why We Like The Stock:
Fastenal (NASDAQ:FAST) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) that has recently signaled heavy insider buying. Insider buying is very positive for a stock, as that indicates that management is buying its own stock. Usually, this is for good reason, such as positive outlook on future business, an upcoming news announcement, etc. So, when we see a “heavy insider buying” signal, we take a good look at it. It helps that FAST is in a hot sub-industry and features a positive technical set-up. Along with its competitors W.W. Grainger (NYSE:GWW), United Rentals (NYSE:URI), MSC Industrial Direct Co. (NYSE:MSM), and WESCO Intl. (NYSE:WCC), FAST has been trending higher this year. Since mid-December, the stock has kept above its 50-day moving average, which is a sign of a healthy uptrend. Currently, FAST has pulled back off of its recent February highs around $53, making for a good entry point. The stock also just crossed above its 5- and 10-day moving averages, which is bullish in the short-term. We like FAST at current prices due to its nice technical set-up and heavy insider buying signal.
We Would Be Buyers:
At the current price (~$51.00), or on a pullback to the 50-day moving average ($50.08).
Fastenal Company is engaged in selling industrial and construction supplies in wholesale and retail. The industrial and construction supplies are grouped into eleven product lines. The Company distributes the supplies through a network of approximately 2,600 company owned stores. Most of its customers are in the manufacturing and non-residential construction markets. The manufacturing market includes both original equipment manufacturers (OEM) and maintenance and repair operations (MRO). The non-residential construction market includes general, electrical, plumbing, sheet metal, and road contractors. Other users of its product include farmers, truckers, railroads, mining companies, federal, state, and local governmental entities, schools, and certain retail trades. Geographically, its stores and customers are primarily located in North America. As of December 31, 2011, the company had 2,585 store locations.
Stock Rating: 7.0
The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.
Fastenal – Last 3 Months
Fastenal – Last 12 Months
Fastenal – Last Five Years
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At the time of publication the editor and affiliated companies own the following positions: FAST
Note: Positions may be bought or sold while this publication is in circulation without notice.