(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — A business that makes itself indispensable to its customers ends up being a business with a defensible moat, predictable cash flow, SG & A expenses in check and a happy employee culture. I like to think I am running such a business in wealth management — by incorporating tax and insurance in-house for wealth management clients, we’ve made ourselves indispensable. The more our clients come to rely on us for, the higher the engagement, the less risk of turnover. Customer turnover is expensive. Companies that build indispensable services experience less disruptive churn and shareholders benefit as a result. Some of the biggest winners in the history of the stock market have had this characteristic. Think Salesforce, Apple, Costco, and Starbucks. For many, interacting with these companies is part of their regular routine, and it would take a lot for a competitor to pry them away. As an investor, I am always looking for stories like the one we’re about to tell. Sean has written up a piece describing the strategy Fastenal (FAST) uses to make itself indispensable to its customers and the tactics that they employ to execute the strategy. We’ll take a look at the stock’s technicals as well but, first, it’s story time. Best Stock Spotlight: Fastenal Co (FAST) On the list since: 4/12/2025 Sean — Fastenal is not just an industrial company selling screws and bolts, they have successfully vertically integrated their business to allow for more predictable, higher margin relationships with customers. Their stock price is reflecting the momentum the business is seeing. The long-term trend in this stock looks incredible: Fastenal acts more like a logistics and inventory partner than a typical industrial supplier. FAST sets up industrial-level vending machines, bins, and on-site locations that Fastenal stocks and monitors. FAST has one of the densest networks in terms of stores and distribution centers. This allows them to achieve economies of scale in purchasing, logistics, and inventory management. One of their largest focuses has been the “Fastenal Managed Inventory” — a digitized tech platform that fulfills, tracks, processes and delivers products to customers. Fastenal is creating dashboards monitoring inventory and supplying that inventory to customers. Via Quartr, 44.1% of total sales came through FMI technology in Q2 2025, up from 41.8% in Q2 2024 and 39.8% in Q2 2023. There are 132,174 integrated devices installed in total, which is up 10.8% year-over-year. Diving into their earnings from Monday of this week, the company beat on top and bottom lines, sending the stock about 4% higher post-earnings. Sales were up 8.6% year-over-year, operating margin improved to 21.0% from 20.2% last year, and earnings per share was up 12.7% year-over-year. This company is taking tariffs head-on. FAST dedicated an entire slide in their presentation to the current trade situation (via Fastenal): The CFO noted they have been proactively engaging with customers this year as it relates to tariff costs. From the CFO: “Fastenal has historically been able to win market share during periods of disruption on the strength of our nimble sales, our frugal and adaptive culture and the weight of the technologies and the global supply chain resources we can apply to finding solutions to customer challenges. This is our expectation in the current environment.” FAST has implemented 3 pricing changes and plans on a phased approach to increase prices 140-170 basis points, depending on trade policy in 2025. The stock is within 5% of new all time highs. It sits about 8% above its 50 day moving average and about 15% above its 200 day moving average, well within a defined uptrend. Risk management Josh — This one’s easy. The stock is slightly overbought thanks to the post-earnings reaction from the start of this week. I might give it a day or two to work off some of that overbought condition, even if I am not necessarily expecting much of a pullback. In a situation like this, position sizing is the key thing to focus on. If you’re worried you missed it, you can enter the trade in stages. Worst-case scenario, it keeps rolling higher and you don’t have enough. It happens. Above, I’m showing you a three-year chart with a 50-WEEK moving average (orange line, currently at $38 and change). I want you to pay attention to how pristine this uptrend has been. Since 2023, the dip-buyers have consistently come in as the stock flirted with its trendline and they bought it right back up. I would take advantage of any weakness here and then follow the trade with a mental stop loss (or physical if you’re easily distracted) at that 50-week, checking on it every Friday to see if something’s changed. If not, I’d stay long. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC” TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
