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.