The fastener business is picking up and Fastenal (Nasdaq: FAST) is raking in profits, but investors still aren't impressed.

On Tuesday, Fastenal reported second quarter revenue increased 23.4% to $603.8 million, and earnings per share were $0.51. Both numbers beat Wall Street expectations but the stock fell 5% during trading yesterday.

Company performance has really picked up in the past six months with double-digit revenue increases, every month, at stores open at least five years. This follows more than a year of negative growth and shows a turnaround is beginning to take shape in the manufacturing sector.

In comments during the conference call, the company was positive for the first half of 2011 so I was surprised to see the stock fall in trading during the day. A beat on the top and bottom line along with generally positive comments from management isn't usually met with such distain.

Fastenal's stock hasn't kept up with the recent rally felt by W.W. Grainger (NYSE: GWW) and MSC Industrial Direct (NYSE: MSM) and could be struggling to keep up with a relatively higher valuation. Both W.W. Grainger and MSC have lower price/earnings ratios than Fastenal's 31.5 ratio and have seen similar growth rates over the past five years, so even after great results Fastenal still might not be the best value in the sector.

Wall Street may not have been impressed by results, but I see conditions improving across the board for Fastenal and a positive view of 2011 from management. As the economy improves and Fastenal expands internationally, the company should continue to perform well.

Interested in reading more about Fastenal? Click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

More on Industrial Suppliers: