As an equity investor, we’re looking to find great businesses in which to invest our capital. In my case, I’m retired, but I have a good chunk of my savings invested in equities – stocks and equity mutual funds – that I expect will grow over the next 20 years.
I’m not looking for businesses that may make a quick buck, I’m looking for businesses that will keep growing over many years, and will keep rewarding me as a shareholder.
Today’s example is a business I wrote about 1 year ago. The company is called Fastenal.
Here’s what I wrote after reading last year’s annual report. I also wrote about them here.
Wow, That’s Different
If you choose to take a look at Fastenal’s annual report, you’ll be struck by how different it looks from many other companies’ reports.
It begins with a picture
And then it gets to the shareholder letter.
For those who have read a number of shareholder reports, 2 things stand out.
- The pictures help me quickly understand the important components of the business. I like a company that takes the time to make this easy for me, as a shareholder.
- The letter seems is if it is written by a person. Some of these are clearly written by marketing and legal teams and you can read 2 pages and get no information. Here are some examples of what I learned:
- Dan has been CEO for 10 years
- The industry is in a slow economic cycle
- He’s lead through prior slow cycles
- People are important – he talks about attending a 40 year tenure celebration
- I love: “We can’t control the market, but we can control our strategy and service, and it starts by understanding our customers. “
Investor Page
Every public company has an investor page on their website. Here is Fastenal’s.
Here you can find lots of info about the company. It is quite different from other companies’ sites. I find that I can spend 15 minutes and learn quite a bit. Not so much on most other sites.
Performance
All that is cool, but we’re here to make money. Back to my introduction, as investors, we’re looking to find great businesses that will grow. There are lots of companies that have a great website and wonderful messages but they can’t seem to make a buck.
I’m expecting to put up some capital, hold for 20 or more years and find my investment has grown.
Looks pretty good. If I invested $9,000 when they went public in 1987, I’d have over $13 million today. Not bad.
They also explicitly call out how our investment would have performed in 5 and ten year periods. And they also pay a dividend.
Track Record
Fastenal went public in 1987 so they’ve published 38 years worth of performance data. They’ve been in business since 1967. So the company has been around 58 years.
Wrap-Up
I’ve written a lot about commitment. I like the old joke about breakfast. The chicken is involved, but the pig is committed.
Businesses like Fastenal make it easier for us to develop that level of commitment. It’s easy to get to know how their leaders think, what they prioritize and how they act. It’s easy to see their results. I love a picture rather than hunting through data in tables and trying to make sense of it.
I have a small position in Fastenal. I’ve also sold some covered calls. But after reading through today’s annual report, I’m moving Fastenal up on my watch list.