Core Insights - Mairs & Power Balanced Fund experienced a challenging start to Q2 2025 due to tariff uncertainties, Middle East conflicts, rising national debt, and a poor dollar performance, but managed to recover and rise 25% by the end of the quarter [1] - The fund returned 2.66% in the first half of 2025, underperforming against benchmark indexes which rose 5.43% and the Morningstar Moderate Allocation peer group which increased by 5.67% [1] Company Performance - Fastenal Company (NASDAQ:FAST) reported a one-month return of -4.40% but saw a significant 35.74% increase in value over the last 52 weeks, closing at $47.99 per share with a market capitalization of $55.075 billion on September 23, 2025 [2] - The fund's overweight position in the Industrials sector contributed positively in the first half of 2025, but poor stock selection led to an overall negative impact [3] - Toro (TTC), another significant holding, reported slowing revenue growth and lowered guidance, negatively affecting its stock price, while Fastenal's growth indicated market share gains despite similar market weaknesses [3] Hedge Fund Interest - Fastenal Company (NASDAQ:FAST) was held by 42 hedge fund portfolios at the end of Q2 2025, an increase from 39 in the previous quarter, indicating growing interest among institutional investors [4]

Core Insights - Fastenal Company (NASDAQ: FAST) has a strong history of raising dividends while providing a market-beating yield, making it an attractive investment option for dividend growth investors [1] - The company has successfully increased dividends through multiple recessionary periods, indicating a robust business model capable of withstanding economic downturns [1] Investment Focus - The analysis emphasizes investing in companies with a long history of dividend growth, which are seen as resilient during economic challenges [1] - The article lists various sectors and companies that the analyst is long on, including Energy (CVX), Finance (JPM), Industrials (LMT), and Technology (MSFT), among others [1]

Core Insights - The excitement surrounding forward stock splits in high-profile companies has significantly contributed to the S&P 500's performance in 2025, alongside the trend of artificial intelligence [1][2] Group 1: Stock Split Dynamics - A stock split allows companies to adjust their share price and outstanding share count without affecting market capitalization or operating performance [2] - Investors typically favor companies that announce forward splits, as these are perceived to make shares more affordable for retail investors [4] - Companies completing forward splits often demonstrate superior innovation and execution compared to their competitors [4] Group 2: Company Performances - O'Reilly Automotive has seen a 36% year-to-date increase, driven by a 15-for-1 forward split and strong demand for auto parts due to the aging vehicle population [5][6][7] - Fastenal's shares are up 32% year-to-date, benefiting from its corporate culture of frequent stock splits and strong ties to contract sales, which account for over 73% of its net revenue [11][14] - Interactive Brokers Group has outperformed with a 44% year-to-date increase, supported by a favorable stock market environment and significant investments in technology that enhance customer offerings [17][18][19][20]

Company Overview - Fastenal Company, based in Winona, Minnesota, specializes in the wholesale distribution of industrial and construction supplies both in North America and internationally [1] - The company has a market capitalization of approximately $55 billion, categorizing it as a large-cap stock, which reflects its substantial size and influence in the industrial distribution sector [2] Stock Performance - Fastenal's stock reached an all-time high of $50.63 on August 25 and is currently trading 5.3% below that peak [3] - Over the past three months, FAST stock has increased by 12.3%, outperforming the Industrial Select Sector SPDR Fund's (XLI) 5% increase during the same period [3] - Year-to-date, FAST stock has surged 33.4%, and over the past 52 weeks, it has risen by 39.7%, significantly outpacing XLI's gains of 14.9% and 18.2%, respectively [4] Financial Results - Following the release of better-than-expected Q2 results on July 14, Fastenal's stock prices gained 4.2% [5] - The company's revenue for the quarter increased by 8.6% year-over-year to $2.1 billion, exceeding market expectations by 88 basis points [5] - Fastenal's earnings per share (EPS) for the quarter rose by 12.7% year-over-year to $0.29, surpassing consensus estimates by 3.6% [5] Competitive Position - Fastenal has outperformed its peer W.W. Grainger, Inc. (GWW), which experienced a 5.7% decline year-to-date and a 1.7% increase over the past 52 weeks [6] - Among 16 analysts covering FAST stock, the consensus rating is a "Hold," with the stock trading slightly above the mean price target of $46.40 [6]

Core Insights - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] - Fastenal (FAST) currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [2][3] Price Performance - Over the past week, Fastenal shares increased by 3.09%, while the Zacks Industrial Services industry rose by 3.51% [5] - In a longer timeframe, Fastenal's shares have appreciated by 22.8% over the past quarter and 48.94% over the last year, significantly outperforming the S&P 500's gains of 9.72% and 16.49%, respectively [6] Trading Volume - Fastenal's average 20-day trading volume is 5,864,943 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Estimates - In the last two months, 8 earnings estimates for Fastenal have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.09 to $1.11 [9] - For the next fiscal year, 8 estimates have also moved higher without any declines [9] Conclusion - Considering the positive price trends, trading volume, and favorable earnings outlook, Fastenal is positioned as a strong candidate for near-term investment with a Momentum Score of B [11]

Company Performance - Fastenal has gained approximately 36.7% year-to-date, significantly outperforming the average gain of 5.7% in the Industrial Products group [4] - Fastenal currently holds a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - Over the past three months, the Zacks Consensus Estimate for Fastenal's full-year earnings has increased by 2.4%, reflecting improved analyst sentiment [3] Industry Context - Fastenal is part of the Industrial Services industry, which consists of 18 stocks and is currently ranked 45 in the Zacks Industry Rank [5] - The Industrial Services industry has seen an average gain of 9.4% year-to-date, with Fastenal outperforming this group [5] - Another stock in the Industrial Products sector, Gorman-Rupp, has also shown strong performance with a year-to-date return of 8.7% and a Zacks Rank of 2 (Buy) [4][5]

Core Viewpoint - Investors are evaluating Siemens AG (SIEGY) and Fastenal (FAST) to determine which stock offers better value opportunities in the Industrial Services sector [1] Valuation Metrics - Siemens AG has a forward P/E ratio of 20.31, while Fastenal has a significantly higher forward P/E of 44.63 [5] - The PEG ratio for Siemens AG is 2.54, indicating a more favorable valuation compared to Fastenal's PEG ratio of 4.51 [5] - Siemens AG's P/B ratio stands at 3.16, contrasting with Fastenal's P/B ratio of 14.93, further highlighting Siemens AG's relative undervaluation [6] Analyst Outlook - Siemens AG currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision activity, while Fastenal has a Zacks Rank of 3 (Hold) [3] - The improving analyst outlook for Siemens AG suggests a more favorable investment environment compared to Fastenal [3] Value Grades - Siemens AG has a Value grade of B, while Fastenal has a Value grade of D, indicating that Siemens AG is perceived as a better value investment [6]

Financial Data and Key Metrics Changes - The company reported a strong revenue growth of 44% year-on-year, reaching a revenue run rate of over €100 million [53][54] - Gross margin per kilowatt hour increased to €0.54, the highest level ever, up from €0.47 in the first quarter [38] - Operational EBITDA expanded by more than 20%, with underlying EBITDA remaining positive despite a net loss of €19.9 million primarily due to network expansion costs [56][57] Business Line Data and Key Metrics Changes - The company opened 17 new stations and expanded 11 existing stations in the first half of 2025, totaling 29 new stations added to the network [28][29] - Energy delivered per station grew by 8.2% year-on-year, with organic volume growth at the stations at 16% year-on-year [38] - The average sales per station were reported to be eight times the market average in Belgium, indicating strong performance [46] Market Data and Key Metrics Changes - Electric vehicle (EV) stock grew by 28% year-on-year, while the company delivered 30% more energy in the same period [9] - EV sales across the EU increased by 22% in 2025, driven by supportive policies and incentives [13] - The company holds a 20% sales market share in Belgium despite having only 3% of the charging locations [46] Company Strategy and Development Direction - The company aims to continue expanding its network, with a target of building over 100 stations annually in the coming years [56] - Initiatives such as the Spark Alliance and the "See You There" marketing campaign are designed to enhance brand awareness and drive EV adoption [11][30] - The company is focused on fast charging as the fastest growing segment, which aligns with its strategy to optimize station economics [48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing the expected acceleration in EV sales and the company's strategic positioning [61] - The company anticipates that seasonal effects will lead to increased energy needs in the latter half of the year, contributing to revenue growth [78] - Management emphasized the importance of maintaining a balance between network expansion and operational efficiency to achieve long-term profitability [56] Other Important Information - The company has a strong funding position with a cash balance of €113 million and plans to fund a significant portion of its 2026 rollout from current resources [59][60] - The company is assessing bank financing options to support its expansion plans [60] Q&A Session Summary Question: Cash flow dynamics and CapEx increase - Management explained that the increase in CapEx to €43 million in the first half was due to the construction of new stations and expansions, with expectations for positive free cash flow in the future [64][66][71] Question: Charging volumes and seasonal effects - Management clarified that Q2 typically sees lower volumes due to seasonal temperature effects, with expectations for growth in Q3 and Q4 driven by increased energy needs [75][78] Question: CO2 emissions and sales mix - Management provided insights on how CO2 targets influence the sales mix, indicating that compliance with emissions regulations will require a significant increase in electric vehicle sales [86][92] Question: Charge speeds and operational EBITDA margins - Management discussed expectations for increasing charge speeds with new vehicle models and the impact of operational leverage on EBITDA margins in mature markets [100][108]

Core Viewpoint - Fastenal's second-quarter 2025 earnings and revenues exceeded estimates and showed year-over-year growth, reflecting operational discipline and customer expansion despite a sluggish macro environment [2][4]. Financial Performance - The company reported adjusted earnings per share (EPS) of 29 cents, surpassing the Zacks Consensus Estimate of 28 cents, and representing a 12.7% increase from 25 cents in the previous year [3]. - Net sales increased by 8.6% year over year to $2.08 billion, exceeding the consensus estimate of $2.06 billion [4]. - Daily sales also rose by 8.6%, driven by improved customer contract momentum and increased unit sales, with foreign exchange rates contributing positively by 10 basis points [4]. Sales Breakdown - Unit sales growth was supported by more customer sites spending over $10K per month and modest growth in average sales per site, with product pricing adding 140-170 basis points to net sales [5]. - Daily sales of Fasteners increased by 6.6%, Safety Supplies by 10.7%, and Other Product Lines by 9% year over year [5]. End-Market Performance - Daily sales in Heavy Manufacturing rose by 7.5%, while Other Manufacturing grew by 11% year over year [6]. - Non-Residential Construction sales increased by 3%, and Other End-Markets saw an 8.7% growth compared to the prior year [6]. Digital Sales and Technology - Daily sales through weighted FMI devices grew by 14.4%, accounting for 44.1% of net sales, while eProcurement sales rose by 19.3% [7]. - Digital Footprint sales represented 61% of total sales, up from 59.4% in the previous year, with a revised target for 2025 penetration set at 63%-64% [7]. Margin Analysis - Gross margin improved to 45.3%, up 20 basis points year over year, attributed to increased fastener product availability [8]. - Selling, general and administrative expenses as a percentage of net sales decreased to 24.4% from 24.9% in the prior year, with operating margin at 21%, higher than the projected 20.6% [8]. Financial Position - As of June 30, 2025, cash and cash equivalents were $237.8 million, down from $255.8 million at the end of 2024, while long-term debt decreased to $100 million from $125 million [9]. - The company returned $252.5 million to shareholders in dividends during the quarter, with net cash provided by operating activities totaling $278.6 million, an 8.1% increase from the previous year [9]. Market Outlook - Estimates for Fastenal have been trending upward, indicating a promising outlook, with the company holding a Zacks Rank 2 (Buy) [10][12].

Core Viewpoint - Fastenal has demonstrated significant growth over the past 30 years, with a share price increase of 7,300%, outperforming the S&P 500's 1,300% rise, despite being considered a "boring" business focused on fasteners and hardware [1][2]. Group 1: Company Growth and Performance - Fastenal has experienced consistent and rapid growth in both revenue and earnings, leading to nine stock splits since its public debut in 1987 [3]. - The company's market capitalization has reached approximately $54 billion, indicating that future growth may not match historical rates due to its larger size [5]. - Fastenal's growth strategy includes bolt-on acquisitions, which are expected to continue, leveraging its size and institutional knowledge to identify and integrate new acquisition targets effectively [6]. Group 2: Technological Advancements - Fastenal has evolved into a logistics powerhouse, ensuring timely delivery of parts to customers, which is supported by investments in technology that smaller competitors may lack [7]. - The technological infrastructure allows for quick integration of new acquisitions, maintaining operational efficiency and effectiveness [7]. Group 3: Valuation and Investment Considerations - Current valuations show that Fastenal's price-to-sales and price-to-earnings ratios are above their five-year averages, with the stock trading near all-time highs [8]. - Historical patterns indicate that Fastenal's stock often experiences significant drawdowns of 25% or more, suggesting that investors may benefit from waiting for a price pullback before purchasing [8][9]. - While the company's growth history is impressive, potential investors should adopt a long-term perspective, considering the stock's current expense level [9].