Screw You!Picture taken from Bloomberg Businessweek magazine
Voila. On this special date of 29th February I read an interesting article from Bloomberg Businessweek magazine about Fastenal’s tremendous stock. So this afternoon I attended a Financial Planning class in my campus and my lecturer showed how stocks of certain companies have grown astronomically since being offered publicly. He showed the graph of Microsoft’s stock in the past 2 decades. Here is the snapshot I took from Yahoo! Finance:
There was a huge peak at 2000 but the price of the stock has dwindled since that time (I predict this is due to the rise of Apple and Google). Bloomberg said that the increase from Microsoft’s initial stock price is 9,906 percent. This is quiet cool to show to your student that investing is a great choice, right?
But hold the drum roll, Fastenal’s stock is far more amazing. If you don’t know about Fastenal (I hadn’t known it either until I landed on Bloomberg magazine) you can go to http://www.fastenal.com/web/home.ex. You will perhaps be surprise that the business is about nuts and bolts. Yes literally nuts and bolts. You can read the complete history of this company in Bloomberg magazine or any other sources, but what I want to pinpoint here is its skyrocketing increase of stock price from 13¢ in its initial public offering in 1987 to around $52.43 at the day this post written.
The exact number is not important. On that graph from Yahoo! Finance, the year is started from 1994 while according to the story Fastenal began its IPO in August 1987 and now has experienced 38,565% increase from its first stock price in that day. What a shocking number. What makes Fastenal the king in its market share is its diversified products combined with sophisticated sales force. You can go to its website and see that it has almost whatever nuts or bolts or pin or anything else you mostly need for your auto parts. This story clearly describes that you don’t always need high tech or formidable innovation to grow your stock price. We can do what Kierling, the Fastenal founder, did – offering products that almost all consumers need. That’s how Fastenal screw you.