Bailard Inc. significantly increased its investment in Fastenal Company, growing its stake by an impressive 317.7% in the third quarter of 2023. According to the firm’s latest Form 13F filing with the Securities and Exchange Commission, Bailard now owns 34,648 shares of Fastenal, following the acquisition of an additional 26,354 shares during the period. As of the filing date, these holdings were valued at approximately $1.7 million.
This increase in investment reflects a broader trend among institutional investors. Other hedge funds have also adjusted their positions in Fastenal. For instance, Patton Fund Management Inc. initiated a new position worth about $229,000 in the second quarter. Meanwhile, Values First Advisors Inc. boosted its stake by 183.0%, owning 9,378 shares valued at $394,000, after adding 6,064 shares in the last quarter.
Vanguard Group Inc. has made notable adjustments as well, increasing its holdings in Fastenal by 103.5% during the same quarter. Vanguard now owns 149,169,494 shares, valued at approximately $6.27 billion after acquiring an additional 75,852,223 shares. Additionally, Nordea Investment Management AB raised its position by 6.3% in the third quarter, while Optas LLC doubled its stake with a 100.2% increase during the second quarter.
As a result of these investments, institutional investors now hold approximately 81.38% of Fastenal’s stock.
Fastenal’s Financial Performance and Market Position
Fastenal’s shares opened at $44.78 recently, with the company reporting a strong financial position. It has a quick ratio of 2.19 and a current ratio of 4.85, indicating solid liquidity. The company’s debt-to-equity ratio stands at a mere 0.03, highlighting its low leverage. Over the past twelve months, the stock has fluctuated between a low of $35.31 and a high of $50.63. Fastenal boasts a market capitalization of $51.41 billion, a price-to-earnings (P/E) ratio of 40.71, and a beta of 0.90.
On January 20, 2024, Fastenal announced its quarterly earnings, reporting an earnings per share (EPS) of $0.26, matching analysts’ expectations. The company generated $2.03 billion in revenue, slightly below the expected $2.04 billion. Fastenal achieved a net margin of 15.35% and a return on equity of 32.83%, with revenue increasing by 11.1% year-over-year. In the same quarter of the previous year, the EPS was reported at $0.46.
Looking ahead, analysts forecast that Fastenal will report an EPS of $2.15 for the current fiscal year.
Dividend Increase and Market Sentiment
Fastenal also revealed a quarterly dividend, scheduled for payment on February 26, 2024. Shareholders of record as of January 29, 2024 will receive a dividend of $0.24 per share, marking an increase from the previous dividend of $0.22. This change results in an annualized dividend of $0.96 and a dividend yield of 2.1%. The company’s dividend payout ratio currently stands at 82.24%.
Market sentiment surrounding Fastenal remains cautiously optimistic. Analysts have noted the company’s strong cash flow, which increased by approximately 30% during the last quarter, supporting capital returns and dividend sustainability. Some market commentators highlight Fastenal’s long history of consistent dividend increases, low leverage, and capacity to raise payouts, which continue to attract investor interest.
However, mixed views persist among analysts. While some emphasize the potential for recovery linked to construction and manufacturing data, others express caution due to recent revenue misses and margin pressures driven by higher input costs. Notably, Wolfe Research recently downgraded its price target for Fastenal from $43.00 to $42.00, maintaining an underperform rating.
In related news, insider trading activity has been observed, with Director Sarah N. Nielsen purchasing 1,000 shares at an average cost of $39.60 per share, increasing her position by 25.00%. Director Hsenghung Sam Hsu also acquired 1,000 shares at an average price of $49.58, enhancing his ownership by 11.11%.
As Fastenal continues to navigate the complexities of the market, its performance will be closely monitored by investors and analysts alike, particularly in light of ongoing economic conditions and sector developments.
