Fastenal has been on a slow decline following its .01 miss in early April. While the miss is important, and they haven’t had one since 2009, the management attributes it to ‘taking their eye off the ball’ this quarter versus any systemic problem with their model. FAST is very happy with the continued and consistent growth in their business (sales up 20% this Q). The mood from their customers and vendors during a recent conference was very upbeat and confidence in Fastenal and the US economy is growing.
The Vending machine contract signings are really gaining traction, growing from 250 2 years ago and 1400 last year to over 4500 today. This accounts for 17k vending machines throughout their customers. In addition, the company also began taking orders on a smaller vending machine (about 2/3 the size of the current one) with a smaller capacity for smaller companies.
My feeling is the company is continuing to grow and offer control and cost savings to their customers. This value-add will also help Fastenal keep prices as low as possible with more-efficient service measures. I look at this recent dip as a buying opportunity and will be reviewing this stock as a potential pitch for this month’s meeting.