In fact the companyin question is decidedly low-tech. Italso resides in the industry hit most hard as a result of the subprime scandaland further devastated by ravages of the recession. Since the infamous ‘Black Monday’ of October 1987, thiscompany's share price is up 38,565 percent. Microsoft, by contrast, is up lessthan 10,000 percent over that same period (otherwise most impressive). Apple shares have gone up by a mere 5,500percent, though to be fair even in the early 1990’s Apple was struggling forliteral survival.
With all of the stock market’s controversies through theyears, its glamour and glitter, the company whose stock has registered thegreatest percentage of growth represents products that couldn’t be more basic. They likely appear on relatively few Christmaslists.
The company is Fastenal. While not a household name to the general public, Fastenal is revered bythose who work or closely follow the world of Wall Street as well as its legionof happy customers and frustrated competitors. Unlike many hot, speculative issues which rapidly burn out as stockmarket disasters, Fastenal has backed aggressive expansion plans with boldinvestments in personnel (especially in terms of its sales force), newlocations and technologies meant to make its products ever more available forits generally professional customers.
Essentially Fastenal has accurately analyzed the needs ofits customers and determined how to best serve them through innovation andinvestment. The company’s website representsan online catalogue that supports 10,700 pages. A visit to the website begins with an offering of fasteners (nosurprise) above quick groupings of many basics including such diverse productlines as Tools & Equipment, Chemicals & Paints, Plumbing, Safety,Packaging, Cutting Tools, Electrical, Janitorial, Welding, Hydraulics, Fleet& Automotive and on and on.
There is even an imposing section titled Fastenal Racing,fully documenting Fastenal’s NASCAR racing team led by driver CarlEdwards. As seems typical of Fastenal,there is a link to NASCAR’s website offering seemingly almost as many officialFastenal Racing products as Fastenal offers its professional customers.
In the company’s desire to make its great breadth and depthof product more directly available to customers, the company has invested inwhat it terms Automated Fastenal Stores. These are basically vending machines whichoffer essentials such a fasteners. Theycan be placed at job sites or near customer locations for the timelyconvenience of the company’s clientele. Though a considerable investment, the company currently operates nearly 7,500of these customer favored devices.
Chain Store Guide’s database of Home Center Operators & HardwareChains indicates that Fastenal began the new century with barely over 800locations. By the time the subprime messbegan to affect the market Fastenal was approaching 2,000 locations. Two years later as the recession was cominginto its own and most companies in this industry were cutting expansionprojections, the company was nearing 2,200 venues. By the end of 2011 the company was operatingthrough 2,585 locations. This grew to2,611 at the end of its recently completed first quarter. Hard economic times for the nation, andespecially for this industry, seem to have been circumvented by Fastenal’sfocused and aggressive management style. Their motto could easily be, ‘You’ve got to invest money to make money’.
During this period, CSG’s database of Home Center Operators& Hardware Chains shows a brilliant financial picture in keeping with theshowing of Fastenal’s Wall Street performance. The company came into the new millenniumwith annual sales of just over $600 million. For fiscal 2011, the company recentlyannounced an annual sales figure of $2.77 billion, well more than quadruplingsales in just over an economically challenging decade. This is a fitting example in which acompany’s financial performance is correctly mirrored by its stock’sperformance on Wall Street.
In speaking to analysts across all industries, we seem toagree that one can generally tell a lot about a company’s success by the detailand clarity of its annual and especially its quarterly financial releases. Even Fastenal’s financials press releases area paradise for those who can’t get enough when it comes to statistics. In addition to historical quarterlycomparisons of store counts and sales we can easily compare store personnelcounts and the company’s growth of its heralded vending machine business, whichis clearly a hit with customers and a key to the company’s financial growth, amajor difference maker against competitors.
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