As for one of his industrial favorites, Fastenal (FAST), Frels says that its profits could rise by 10% annually, long-term, boosting its shares, recently around 38.

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Fastenal, which distributes nuts, bolts, clamps, clips and other industrial and construction necessities, boosted its semiannual common dividend to 35 cents a share Monday from 27 cents. Disbursement will take place Feb. 27 for investors on the books Feb. 16. The stock goes ex-dividend Feb. 11. The 40-year-old Minnesota company (FAST) has been paying dividends since 1991. Fastenal has sweetened its payout every year since 2002. It also distributed a 27-cent bonus dividend in December. Its current stock-buyback authorization was boosted by one million shares in July and now covers some 1.4 million. Fastenal sells several hundred thousand products via some 2,300 stores and 14 distribution centers throughout the U.S., Canada and a few other countries. Most of its products are made by others, but no supplier accounts for more than 5% of its goods. CEO Willard D. Oberton says that 2008 "was a good year -- good for the first three quarters -- but then it slowed down hard. We don't know where the bottom is at this point."

Outperform - Price 33.15 on Jan. 20
by Baird Securities

Our Outperform and 47 target are based on a 14 times unrevised Ebitda [enterprise value]/calendar '09 estimated [earnings before interest, taxes, depreciation and amortization], versus a historical average of 18 times and historical quarterly average cyclical lows of 13 times to 15 times. We believe that FAST will be significantly higher in 12 months, due to the early-cycle nature of industrial distributors....In '01 (the midst of the last recession)...FAST's stock price increased more than 20%....We estimate FAST has less than a 10% share of the approximately $12 billion threaded-fastener market with...sales of nearly $1.17 billion...Fastenal has no debt, solid cash flow and a 1.5% dividend yield....Risks include a significantly weaker economic backdrop. Market cap: $4.9 billion.

From a recent Mad Money show:"If you want a play on fasteners and a play on the recovery of the economy, I'll send you to Alcoa."

The Winona, Minn.-based maker of industrial and construction supplies said its board approved the repurchase of up to 1 million shares of common stock.

This new repurchase will be in additional to its previous buyback plan, bringing the total repurchase amount up to 1,800,000 shares. The company has about 149 million shares outstanding.

On July 11th, Fastenal reported great second quarter earnings with net income surging 26% to $76.2 million, or 51 cents a share, from $60.3 million, or 40 cents a share in the same period last year. Revenue rose from $519.7 million to $604.2 million, a 16% jump. In the first half of 2008 the company opened 112 new stores bringing the total to 2,272 stores. At its existing stores, sales increased at an average of 8%.

On top of the impressive quarter, it’s also good to see analysts at Robert W. Baird upgraded the stock to outperform from neutral. The analysts mentioned that second quarter sales and EPS beat their estimates and they foresee impressive sales growth in 2009 coming from the impact of its "Pathway to Profit" program. They also lifted the price target from $55 to $58.

The Winona, Minn.-based maker of industrial and construction supplies said its board approved the repurchase of up to 1 million shares of common stock.

This new repurchase will be in additional to its previous buyback plan, bringing the total repurchase amount up to 1,800,000 shares. The company has about 149 million shares outstanding.

On July 11th, Fastenal reported great second quarter earnings with net income surging 26% to $76.2 million, or 51 cents a share, from $60.3 million, or 40 cents a share in the same period last year. Revenue rose from $519.7 million to $604.2 million, a 16% jump. In the first half of 2008 the company opened 112 new stores bringing the total to 2,272 stores. At its existing stores, sales increased at an average of 8%.

On top of the impressive quarter, it’s also good to see analysts at Robert W. Baird upgraded the stock to outperform from neutral. The analysts mentioned that second quarter sales and EPS beat their estimates and they foresee impressive sales growth in 2009 coming from the impact of its "Pathway to Profit" program. They also lifted the price target from $55 to $58.

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