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Hotline Sample Report

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10/11/2019 1:27:22 PM Eastern Time

Fasten Your Seatbelt: There is No Recession
By Charles Payne, CEO & Principal Analyst

 Click here to download PDF version

This morning, Fastenal (FAST) posted its earnings results, and many that were bracing for a manufacturing recession to drag the entire economy lower, let out a big sigh of relief. The company posted results that beat on top and bottom lines, and while management acknowledged a slowdown, the results dismissed the idea the bottom has fallen out.

Fastenal: About Us

Today, Fastenal is many things to many different customers: an expert consultant, a logistics company, a technology provider, and more generally, a distributor of wide-ranging industrial and construction products. These aspects of our service share a common foundation: great people, close to our customers.

Our service model centers on approximately 3,200 in-market locations (a combination of public branches and customer-specific on sites), each providing custom inventory and a dedicated sales team to support local customers.

  • Abrasives
  • Electrical
  • HVAC & Refrigeration
  • Lubricants, Coolants & Fluids
  • Adhesives, Sealants, & Tapes
  • Fasteners
  • Hydraulics
  • Machinery
  • Cutting Tools & Metalworking
  • Fleet & Automotive
  • Janitorial & Cleaning
  • Material Handling, Lifting, & Rigging
  • Electronics & Batteries
  • Hardware
  • Lighting
  • Mil-Spec
  • Motors
  • Pumps
  • Packaging & Shipping Products
  • Tools & Equipment
  • Office & Breakroom Supplies
  • Raw Materials
  • Plumbing
  • Test & Measurement
  • Outdoor Products & Equipment
  • Safety
  • Pneumatics
  • Welding
  • Paint & Painting Supplies
  • Security
  • Power Transmission

The news has sent FAST shares +17%, leading the way for Industrials to be the second-best performing sector in today’s session.  Note: Materials are the best performing sector on this manufacturing relief and investors search for value.  The Industrial sector (XLI) has been ranged-bound since late 2018, so while this is a welcomed move, there’s more to go before a breakout confirms the worst is over.



Investors are rotating out of safe havens Utilities, Real Estate and Consumer Staples, but long-term investors should take care to remove that balance from their portfolios.

S&P 500 Index



Communication Services (XLC)



Consumer Discretionary (XLY)



Consumer Staples (XLP)



Energy (XLE)



Financials (XLF)



Health Care (XLV)



Industrials (XLI)



Materials (XLB)



Real Estate (XLRE)



Technology (XLK)



Utilities (XLU)




Donald J. Trump @realDonaldTrump

Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!

9:49 AM - Oct 11, 2019

President Trump will meet with China’s Vice Premier Liu He around 2:45, and they are scheduled to discuss trade for 85-minutes.   So far, it feels like this could be the inflection point that gets trade negotiations back on track. 

This isn’t a “skinny deal. ” It’s a step in the process that should make the remaining negotiations run smoother.

Long Idea: Dover Corp (DOV) @ $97.88
Industry: Industrial; Machinery & Equipment
Click here to view the trading alerts that followed this recommendation

Trading Parameters
Status Closed
Entry Price$97.88
Entry Limitsee comments
Stop LossN/A

Options Trade Parameters
Status Closed
Type Call
Option Symbol DOV191220C00
Entry Price $5.80
Strike Price $95.00
Expiration Date 12/20/2019
  Add to Position Tracker

BACKGROUND: Dover Corporation provides equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services worldwide. The company operates through three segments: Engineered Systems, Fluids, and Refrigeration & Food Equipment. The Engineered Systems segment offers precision marking and coding, digital textile printing, soldering and dispensing equipment, and related consumables and services; and automation components, including manual and power clamps, rotary and linear mechanical indexers, conveyors, pick and place units, glove ports, and manipulators, as well as end-of-arm robotic grippers, slides, and end effectors for fast-moving consumer goods, digital textile printing, vehicle service, environmental solutions, and industrials end markets. The Fluids segment handles fluids across the retail fueling, chemical, hygienic, oil and gas, and industrial markets. This segment also manufactures pumps that are used to transfer liquid and bulk products in various markets, including refined fuels, liquefied petroleum gas, food/sanitary, transportation, and chemical process industries; pumps and connectors for use in various bio-processing, medical, and specialty applications; and pumps, filtration systems, pelletizing equipment, compressors, and bearings for use in the chemical, polymer, power generation, oil and gas, industrial, and marine industries. The Refrigeration & Food Equipment segment manufactures refrigeration systems, refrigeration

SKINNY: Dover Inc (DOV) management continues to make progress in the company's transformation. The firm is scheduled to report earnings next week, and the stock may see some volatility. Our target $117.

Key Fundamentals
PEG  1.60
Book Value  20.32
Institutional Holdings  90.74
Price/Sales  1.95
Average Daily Volume  837.75K
Shares Outstanding  145.44M
Market Value  14.23B
Insider Activity  4 Buys 3 Sales
52-week High  103.47
52-week Low  65.83
Annual Earnings Estimate  6.28

Analyst Coverage
 Robert W. Baird Downgraded  Neutral
 RBC Capital Reiterated  Sector Perform

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