Wall Street Applauds Fastenal and Grainger for their Financial Performance but Has Concerns About Share Valuation
Investopedia blogger Ryan C. Fuhrmann says the only thing to dislike right now about W.W. Grainger Inc., Lake Forest, Ill. (GWW), is its “lofty share price” valuation. In a July 19 posting on www.Investopedia.com, he gives the company kudos for its double-digit increases in 2Q net profits and sales, but in his opinion, “The opportunity cost is too high as many other leading firms trade at much lower valuations.” On the morning of July 20, the company's stock was trading at $102.77 at a price/earnings ratio of 16.59, according to Yahoo Finance.
Another Investopedia blogger, Sham Gad, made some similar observations about Fastenal Inc., Winona, Minn. (FAST) in his July 19 posting. Said Gad, “Fastenal's quarter continues the company's wonderful long-term financial record. As the economy slowly improves, the company should continue to execute its growth strategy. Yet shares have caught up with this great little business and it's best to watch from the sidelines today.”
On the morning of July 20, Fastenal was trading at 47.63 per share at a lofty 32.31 price/earnings ratio, according to Yahoo Finance.
About the Author
Jim Lucy Blog
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Jim Lucy has been wandering through the electrical market for more than 30 years, most of the time as an editor for Electrical Wholesaling, Electrical Marketing newsletter and CEE News. During that time he and the editorial team for the publications have won numerous national awards for their coverage of the electrical business. He showed an early interest in electricity, when as a youth he had an idea for a hot dog cooker. Unfortunately, the first crude prototype malfunctioned and the arc nearly blew him out of his parents' basement. Before becoming an editor for Electrical Wholesaling magazine and Electrical Marketing, he earned a BA degree in journalism and a MA in communications from Glassboro State College, Glassboro, NJ., which is formerly best known as the site of the 1967 summit meeting between President Lyndon Johnson and Russian Premier Aleksei Nikolayevich Kosygin, and now best known as the New Jersey state college that changed its name in 1992 to Rowan University because of a generous $100 million donation by N.J. zillionaire industrialist Henry Rowan. Jim is a Brooklyn-born Jersey Guy happily transplanted in the fertile plains of Kansas for the past 20 years.