Hsenghung Hsu, a director at Fastenal (FAST), recently started a stake at the company with a 2,000 share buy. The buy came to just over $88,000.
This follows on a 550 share buy from another director back in September. Prior to that, insiders have been sellers throughout the year, at prices as much as 12 percent higher than where shares currently trade. The buy comes after a rally that boosted the company’s shares by 18 percent in the past year.
Overall, insiders own a scant 0.33 percent of shares at the company. The industrial and construction supplier has continued to grow earnings and revenues in the past year, albeit at single-digit levels.
The company also recently increased its annual dividend payout, a strong sign at a time when many companies have reduced, suspended, or eliminated dividends.
Action to take: The company’s relative operational strength and insider buying point to a continued move higher in shares, barring a market correction.
The February 2021 $45 calls, which have a bid/ask spread around $2.45, are a great way to bet on that trend. A continued rally could lead to the options moving in-the-money, at which point they’ll move dollar-for-dollar higher with shares. As a slower industrial play, traders should look to mid-to-high double-digit returns, and a chance to take a profit quickly.