Nusts and bolts investing
Whenever I'm looking for new stocks to add to my portfolios the first thing I do is go to Barchart and sort for the stocks that are hitting the most frequent new highs and then sort through that list. Fastenal (FAST) came right at the top of that list this weekend. The economy, according to the leading economic indicators is recovering and the stock market has been advancing nicely so what I needed was a real nuts and bolts investing idea and that exactly what FAST does.
The company is a wholesaler and retailer of all kinds of fasteners like nuts, bolts, screws in addition to janitorial supplies. If you are going to run a factory, machine shop or repair facility you will need most of the products FAST sells and distributes. They also provide products to the electrical and construction industries. If this economic party is going to get started companies are going to need to buy products through FAST to being production. This company will be in the middle of it all if this economic engine ever gets started.
On the technical side FAST has enjoyed prices advances in 16 of the last 20 trading sessions and was 5 for 5 this week. It's had a nice 36.53% price appreciation in the last 65 days. All 13 of Barchart's 13 technical indicators have a buy signal for a 100% overall Barchart buy recommendation.
Wall Street analysts feel the stock will have an 8.9% sales increase and a 20% earnings increase next year and Piper Jaffray has just this week came out with an overweight recommendation. The fundamentals look very good.
On other sites Wall Street Survivor readers give the stock a 5/5 Survivor Sentiment rating and on Motley Fool CAPS members think the stock will out perform the market by a vote of 785 to 46 with the All Stars in agreement 240 to 11.
This stock meets my criteria:
1 - The stock has had recent price appreciation in more than 50% of the recent trading sessions
2 - Wall Street brokerage firms have positive recommendations out with growth expected in both sales and earnings -- also no trash talking
3 - Other sites confirm my thoughts on the stock
Before I give my recommendation those of you who follow me might start to say that I have a programmed - cookie cutter approach to investing. I think I have a disciplined approach to investing. I look for stocks hitting new highs, then a reason that the company should prosper and lastly see if others disagree. If they disagree, that doesn't mean that I'm wrong and they are right; it's just a flag of caution to rethink my idea to see if they saw something I missed. No matter how much in love I am with a stock if it can't pass those last 3 steps I'm not adding it to my portfolio.
Recommendation: The economy is recovering and FAST will be right in the middle of it all providing what the manufacturing and construction industries need in supplies and fasteners. I'm adding this stock to my Wall Street Survivor
portfolio around 47 with a stop loss no lower than 42.
Disclosure: I do not have a position in FAST at the time of publication.
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides
. Please leave a comment below or email JimVanMeerten@gmail.com