Doppler Analysis of Fastenal: Part 1

Fastenal (FAST) is a wholesaler and retailer of fasteners and other industrial and construction supplies. It is cited by Pat Dorsey in his book The Little Book that Builds Wealth as an example of a company that benefits from a moat protecting it from competition. Because its products are very expensive to ship relative to their prices, Fastenal benefits from having more locations than any competitor and thus being closer to more customers than any competitor. It also helps that when customers need a fastener, they need it immediately and can’t afford to wait for it to be shipped from far away. Fastenal can meet the needs of customers because it has its own in-house truck fleet and thus bypasses the need for UPS and other expensive shipping services. Furthermore, most geographical areas are too small to support a second player in Fastenal’s market. Thus, Fastenal is effectively impossible to dislodge. No conceivable technology can possibly render Fastenal’s product obsolete. Therefore, Fastenal is a high-quality company that is clearly worth further investigation.

Advertisement