Summary

Fastenal is a wholesale industrial distributor with a large moat that has the ability to capitalize on the fragmented market in which it sits.

Although Amazon has moved into this market, Amazon does not currently represent a viable threat to Fastenal’s business.

The fragmentation of the industry allows for a commanding player like Fastenal to expand through acquisitions.

Shares of Fastenal haven’t appreciated with the company’s increasing revenue and earnings over the past three years.

Using a DCF model, I conclude there's about 12% upside to Fastenal from its current share price.