Fastenal (FAST) Looks to Rebuild After a Dismal FY09 - Barron's
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Fastenal (NASDAQ: FAST) had a rough 2009. Sales dropped 17.5% to $1.9 billion, from $2.3 billion in 2008. Net profit also slumped 34.1% to $184 million. Operating-profit margins also slid below a usual level of 50%-plus. And that is making the hardware supply giant well-positioned for growth in FY10, according to Barron's.
The company is now looking to secure its future. It implemented tough cost controls, reduced workforce 12%, cut hours of remaining employees, and slowed store opening pace. In 2009, 69 stores opened, a 57% drop from the 161 opened in 2008. The CEO, Will Oberton, also kept his salary relatively low at $475K, with no options exercised.
With Fastenal reporting revenue increases of 2.4% in January and 4.4% in February, the moves may be working. The CEO is also confident that they will see double-digit growth going into H210, with new store openings in the range of 7 - 10%.
An analyst from S&P sees the stock getting up to $57, and an analyst from BB&T Capital Markets has a 12-month price target of $54.
The company is currently trading at a 30x forward P/E ratio, above the S&P 500's 15x, but about mid-range for the company.
Fastenal boasts $195 million, about $1.32/share, in cash and no debt. The dividend yields 1.7% as well.
The company doesn't actually make its own stuff, rather it imports from Asia, Latin America, and Europe, amounting to 750,000 different products.
The CEO notes that even if the housing market continues to contract, there still is a market out there for in the service industry, which uses the same nuts and bolts as the manufacturers.
The company is now looking to secure its future. It implemented tough cost controls, reduced workforce 12%, cut hours of remaining employees, and slowed store opening pace. In 2009, 69 stores opened, a 57% drop from the 161 opened in 2008. The CEO, Will Oberton, also kept his salary relatively low at $475K, with no options exercised.
With Fastenal reporting revenue increases of 2.4% in January and 4.4% in February, the moves may be working. The CEO is also confident that they will see double-digit growth going into H210, with new store openings in the range of 7 - 10%.
An analyst from S&P sees the stock getting up to $57, and an analyst from BB&T Capital Markets has a 12-month price target of $54.
The company is currently trading at a 30x forward P/E ratio, above the S&P 500's 15x, but about mid-range for the company.
Fastenal boasts $195 million, about $1.32/share, in cash and no debt. The dividend yields 1.7% as well.
The company doesn't actually make its own stuff, rather it imports from Asia, Latin America, and Europe, amounting to 750,000 different products.
The CEO notes that even if the housing market continues to contract, there still is a market out there for in the service industry, which uses the same nuts and bolts as the manufacturers.
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