Fastenal Company currently holds roughly 245.7
M in cash with 1.1
B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.43.
Volatility is a rate at which the price of Fastenal or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Fastenal may increase or decrease. In other words, similar to Fastenal's
beta indicator, it measures the risk of Fastenal and helps estimate the fluctuations that may happen in a short period of time. So if prices of Fastenal fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our
technical analysis page.
How important is Fastenal's Liquidity
Fastenal
financial leverage refers to using borrowed capital as a funding source to finance Fastenal Company ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Fastenal financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Fastenal's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Fastenal's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Fastenal's total debt and its cash.
Fastenal Gross Profit
Fastenal Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Fastenal previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Fastenal Gross Profit growth over the last 10 years. Please check Fastenal's
gross profit and other
fundamental indicators for more details.
Fastenal Volatility Drivers
Fastenal unsystematic risk is unique to Fastenal and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Fastenal you can also buy
Applied Industrial Technologies. You can also mitigate this risk by investing in the industrials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Fastenal important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Fastenal income statement and balance sheet. Here are more
details about Fastenal volatility.
Click cells to compare fundamentals
Another Deeper Perspective
This firm reported the previous year's revenue of 5.65
B. Net Income was 859.1
M with profit before overhead, payroll, taxes, and interest of 2.57
B.
Will Fastenal private investors exit after the drop?
Value At Risk just dropped to -2.45, may call for upcoming price decrease. Fastenal Company has relatively low volatility with skewness of -0.31 and kurtosis of 0.96. However, we advise all investors to independently investigate Fastenal Company to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Fastenal's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Fastenal's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Takeaway on Fastenal Investment
When is the right time to buy or sell Fastenal Company? Buying stocks such as Fastenal isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without
sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
With a less-than optimistic outlook for your 30 days horizon, it may be a good time to quit some or all of your Fastenal holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Fastenal.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Fastenal Company. Please refer to our
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