Hotline Sample Report
This report is a sample for information purposes only. These recommendations are closed.
10/11/2019 1:27:22 PM Eastern Time
Fasten Your Seatbelt: There is No Recession
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.
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.
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
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.
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