Over roughly the last 30 years, Fastenal's (FAST 1.57%) share price has risen by a massive 7,300%. For comparison, the S&P 500 index (^GSPC 0.32%) rose "only" 1,300% or so over the same span. What's interesting here is that Fastenal's business is, at its core, not very exciting. And yet this "boring" company has managed to be a huge growth machine. But is it worth buying after its latest stock split?
Some of the best investments can be "boring"
Wall Street loves things that involve technology, healthcare, and anything modern and complex. That's fine, but sometimes "boring" businesses can be even more interesting and Fastenal is a great example. This industrial company makes fasteners and other hardware items that get used by manufacturers to hold their products together. It's a nuts and bolts company, which is both a pun and an apt description of the business.
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So why has Fastenal managed to capture the attention of Wall Street? The answer is consistent and rapid growth on both the top- and bottom-lines of the income statement. The shares have advanced so rapidly that Fastenal has had nine stock splits since 1988. That 1988 date is interesting because the stock only came public in 1987, highlighting that it has been a growth story since day one.
The most recent stock split happened in May of 2025. So the question for investors is whether or not Fastenal is still worth buying after the latest split and while the stock price is near all-time highs.
The keys to Fastenal's success
For starters, Fastenal is a much larger company today than when it first came public. That may seem like an obvious statement, but with a market cap of around $54 billion it requires a lot more to move the needle on the revenue and earnings fronts than it did some 30 years ago. So even if Fastenal remains a fast growing business it probably won't be able to put up the same kind of growth numbers in the future as it has in the past.
That said, a big part of Fastenal's growth has long been bolt-on acquisitions. This isn't likely to change in the future. And while it needs either larger or more deals to support growth today, it has the size to take on larger and more frequent deals. It also has the institutional knowledge accrued over decades to both identify good acquisition candidates and integrate them quickly. So there's no reason to believe that this facet of Fastenal's business approach is going to stop being effective.
The next big part of Fastenal's story is technology. Not so much in the products it supplies to its customers, but in how it supplies them. It has evolved into a logistics powerhouse, making sure that its customers have the parts they need when they need them and how they need them. There's a lot going on with the logistics piece, but being so much larger today gives the company the wherewithal to invest in technology that smaller peers can't. And the technology behind Fastenal's business means that new acquisitions can quickly and easily be brought up to speed once they are in the fold. Again, there's no reason to believe that Fastenal's business approach to technology is going to change.
The one problem that investors have to come to grips with is valuation. The company's price-to-sales and price-to-earnings ratios are both well above their five-year averages. And the stock is near its all-time highs. Clearly, Wall Street is very aware of how attractive a business Fastenal has been. But here's the interesting thing, the stock has a habit of going through material weak patches. Twenty five percent, or higher, drawdowns are fairly common for the stock. If you are patient, you can keep this growth machine on your wish list and wait to buy it during one of the fairly normal share price pullbacks.
Is Fastenal worth buying right now?
With such an impressive and consistent history of growth, it is hard to suggest that buying Fastenal today would be a mistake. However, it is still an expensive stock. You'll need to go in thinking in decades and not days if you buy it at current valuations. Most investors will probably be happier if they wait for a drawdown before buying. But if that's the path you take, make sure you plan ahead to buy this stock because buying during a drawdown will mean stepping in while everyone else is selling. That can be difficult if you don't set your mind to it ahead of time.
