Insider Move: James Jansen Exercises Options, Realizing $261K At Fastenal

A significant insider transaction involving the exercise of company stock options was reported on December 11, by James Jansen, Executive Vice President at Fastenal FAST, as per the latest SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Monday revealed that Jansen, Executive Vice President at Fastenal in the Industrials sector, exercised stock options for 6,290 shares of FAST stock. The exercise price of the options was $21.0 per share.

During Monday's morning session, Fastenal shares up by 0.9%, currently priced at $62.85. Considering the current price, Jansen's 6,290 shares have a total value of $261,035.

All You Need to Know About Fastenal

Fastenal opened its first fastener store in 1967 in Winona, Minnesota. Since then, Fastenal has greatly expanded its footprint as well as its products and services. Today, Fastenal serves its 400,000 active customers through approximately 1,600 branches, over 1,700 on-site locations, and 14 distribution centers. Since 1993, the company has added other product categories, but fasteners remain its largest category at about 30%-35% of sales. Fastenal also offers customers supply-chain solutions, such as vending and vendor-managed inventory.

Key Indicators: Fastenal's Financial Health

Revenue Growth: Fastenal's revenue growth over a period of 3 months has been noteworthy. As of 30 September, 2023, the company achieved a revenue growth rate of approximately 2.41%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Evaluating Earnings Performance:

• Gross Margin: The company sets a benchmark with a high gross margin of 45.92%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Fastenal's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.52.

Debt Management: Fastenal's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.16.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 31.46, Fastenal's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.9, Fastenal's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Fastenal's EV/EBITDA ratio stands at 21.23, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

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The Relevance of Insider Transactions

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

In the context of legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Understanding Crucial Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Fastenal's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.