Industrial machinery concern Fastenal Company (NASDAQ:FAST) is set to report first-quarter earnings before the bell tomorrow morning. Digging into FAST's earnings history, the stock has closed lower the next day in seven of the last eight quarters -- including a 5.8% fall after its most recent earnings release. On average, the shares have swung 4.3% in either direction in the session after the company reported, looking back two years. For Wednesday's trading, the options market is pricing in larger-than-usual 7.9% one-day move, per Trade-Alert.
As far as direction, options traders are heavily bullish ahead of the company's earnings report, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing FAST with a 10-day call/put volume ratio of 15.32, ranking in the 92nd annual percentile. This suggests calls have been purchased over puts at a much faster-than-usual pace during the past two weeks.
However, some of this recent call buying -- particularly at out-of-the-money strikes -- could be the result of shorts picking up an options hedge before earnings. Short interest rose 10.2% during the most recent reporting period, and now represents 10% of the stock's total available float.
Analysts, meanwhile, remain optimistic toward Fastenal shares. Currently, nine of 12 analysts following FAST consider it worthy of a "strong buy" rating. Just yesterday, in fact, BMO upped its price target on the equity to $57 from $55.
Fastenal stock has picked up 25% over the past nine months, and recently touched a record high of $58.73 on March 16. The machinery stock subsequently fell to the support of its 120-day moving average, and was trading up 1.8% at $54.63, at last check.