Fastenal (FAST) Is Today's Water-Logged And Getting Wetter Stock

Trade-Ideas LLC identified Fastenal (FAST) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Fastenal

(

FAST

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fastenal as such a stock due to the following factors:

  • FAST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.2 million.
  • FAST has traded 5.0 million shares today.
  • FAST traded in a range 211.6% of the normal price range with a price range of $1.80.
  • FAST traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on FAST:

Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, and internationally. The company offers fasteners, and other industrial and construction supplies primarily under the Fastenal name. The stock currently has a dividend yield of 2.8%. FAST has a PE ratio of 23. Currently there are 2 analysts that rate Fastenal a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Fastenal has been 2.9 million shares per day over the past 30 days. Fastenal has a market cap of $11.7 billion and is part of the services sector and wholesale industry. The stock has a beta of 1.11 and a short float of 12.5% with 14.77 days to cover. Shares are down 15.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Fastenal as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.

Highlights from the ratings report include:

  • FAST's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FAST's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FAST has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for FASTENAL CO is rather high; currently it is at 52.61%. Regardless of FAST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FAST's net profit margin of 13.71% compares favorably to the industry average.
  • FAST has underperformed the S&P 500 Index, declining 7.23% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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