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2-Star Stocks Poised to Plunge: Fastenal?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, industrial and construction supplies specialist Fastenal Company (Nasdaq: FAST  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Fastenal's business and see what CAPS investors are saying about the stock right now.

Fastenal facts

Headquarters (Founded) Winona, Minn. (1967)
Market Cap $15.1 billion
Industry Trading companies and distributors
Trailing-12-Month Revenue $2.8 billion
Management CEO Willard Oberton (since 2002)
CFO Daniel Florness (since 2002)
Return on Equity (Average, Past 3 Years) 21.1%
Cash/Debt $144.8 million / $0
Dividend Yield 1.4%
Competitors HD Supply
MSC Industrial Direct
W.W. Grainger

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 7% of the 862 members who have rated Fastenal believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star bradford86, touched on the stock's seemingly unsustainable price action:

Fastenal is repping out new all-time highs like it's nobody's business. Sell. Do not think twice. The valuation here is so high that a small misstep will result in lower prices. The chart is parabolic. Target: $30-$40. I'm betting CAPS points on this one coming back down to earth. Since when can you apply a P/E of 40 to a company set to grow at less than 20%? Well, if your answer was: "In your dreams." You'd be right. Mark my words, Fastenal will fall below $40 in the next 5 years.

What do you think about Fastenal, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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Brian Pacampara
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I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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Related Tickers

7/22/2014 3:59 PM
FAST $44.93 Down -0.07 -0.16%
Fastenal Company CAPS Rating: ****

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