Fastenal Sales Slow as Manufacturing Demand Weakens
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Fastenal sells industrial supplies like fasteners and tools directly to manufacturers. Its sales are cyclical based on economic activity.
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Fastenal's daily sales rate has been declining for 6 quarters, suggesting slowing demand. Heavy manufacturing and other manufacturing sales are also in downtrends.
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Sales of fasteners, Fastenal's largest product line, fell 2% continuing a multi-quarter downtrend. Other products saw mixed results but also slowing trends.
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The post-earnings stock price increase seems unjustified given the weakening sales trends across Fastenal's business indicating economic slowdown.
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Fastenal is a well-run cyclical business but current valuation ratios seem too high given signs of slowing sales and demand.