Manning & Napier Purchases Shares of Fastenal

Company has 5-star predictability with strong financial statements over the previous 10 years

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Jan 24, 2017
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Manning & Napier Advisors Inc., an investment firm headquartered in New York that was founded in April 1970, purchased 15,040 shares of Fastenal Co. (FAST, Financial) for an average price of $43.88 per share.

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Fastenal has a market cap of $14.76 billion, a price-earnings (P/E) ratio of 29.51, an enterprise value of $15.03 billion and a price-book (P/B) ratio of 7.63.

Fastenal is a Minnesota-based company that was founded in 1968. The company is engaged in the wholesale distribution of industrial and construction supplies in North America. Fastenal offers bolts, nuts, screws, studs and related washers and miscellaneous supplies and hardware.

According to GuruFocus Fastenal has a 7/10 financial strength rating with a cash-debt ratio of 0.29, an equity-asset ratio of 0.72 and a Piotroski F-Score of 5 indicating the company’s financial situation is typical for a stable company.

Fastenal also has an 8 of 10 profitability and growth rating with an operating margin of 20.09%, a net margin of 12.61%, a return on equity (ROE) of 26.76%, revenue growth (three years) of 7% and a return on capital (ROC Joel Greenblatt (Trades, Portfolio)) of 37.20%.

Defensive investors Manning & Napier may have decided to purchase shares of Fastenal for the following reasons.

  • The company has a 5-star predictability rating according to GuruFocus. Based on backtesting results stocks with 5-star predictability ratings produce, on average, a 12.1% yearly return over a 10-year sample size.
  • The company has good financial statements with strong profitability and growth.
  • The company has increased its revenue growth by 9.10%, its EBITDA growth by 11.50%, its operating income growth by 11.50%, its EPS without NRI growth by 11.60%, its free cash flow growth by 19.30% and its book value growth by 8.40% over the previous 10 years.
  • The company has a Beneish M-Score of -2.45 indicating it is not a manipulator of its financial statements.
  • The company has a quick ratio of 2.64, ranking it higher than 83% of the 198 companies in the global industrial distribution industry.

Below is a Peter Lynch chart that shows Fastenal is trading above its intrinsic value

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Disclosure: The author does not own any shares of this company.

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