Wall Street Overreacted to Fastenal's Positive Earnings News
With the S&P 500 index hovering near all-time highs and economic growth around the globe showing signs of slowing, market participants are on edge. Bad news from a company can result in harsh punishment, while good news can lead to a wave of investor enthusiasm, which is what Fastenal (NASDAQ: FAST) saw when it reported third-quarter 2019 earnings that beat expectations. The stock rocketed 14% higher the day of the earnings release. It kept rising, too, and is up nearly 20% at this point. But was the news really that good?
The big headline from the third quarter was that Fastenal beat Wall Street's earnings expectations. That's clearly good, but step back and look at the actual numbers. Analysts had been calling for earnings of $0.35 a share in the quarter and Fastenal came up with $0.37 a share -- a $0.02 beat. Yes, shareholders get excited about things like this, but long-term investors shouldn't see a few pennies here or there as all that important.
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Source Fool.com
