Thoughts on Fastenal
Fastenal used to be one of my largest positions. The company had been performing exceptionally well, maintaining revenue growth even through the recession. I'd trimmed my position by 40% when the shares were around $50. Now, the shares are $33, having been absolutely hammered over the last few months in the general absence of recent news.
In addition to stellar performance in 2008, Fastenal unexpectedly paid out a special dividend in December. They paid $0.79 in dividends in 2008, compared to $0.44 last year. The special dividend was $0.27 a share, so they would have paid out $0.52 in normal dividends. The company has nearly zero debt.
I'm not buying more at present because Fastenal is clearly sensitive to the economy. Justin Perucki and Michael Tian, who recently took over the Morningstar Growthinvestor portfolio (and changed the portfolio's mission substantially), mentioned that they both saw near term downside in the stock price for obvious reasons. In the long term, though, Fastenal is consolidating a fragmented market. I see this as an expanding economic moat. I'm definitely holding on. As far as I know, so are the folks at the Sequoia fund, who have a large position.