Today I want to tell you about Fastenal (FAST), the largest distributor of construction fasteners in the United States. Bear with me if you've followed the housing bust and know that homebuilding companies' shares have lost half their value over the past year, because Fastenal's shares have marched to a different beat. It's been one of the few hardware suppliers that gained strength as housing and construction industry stocks got beat down over the past year.

The Minnesota-based construction supply retailer got its start in fasteners in 1967, but has grown to become a dominant force in the $9 billion industrial and construction supply industries. Its product offerings have grown to include tools, cutting tools, hydraulic and pneumatic products, material handling products, janitorial supplies, electrical supplies, welding supplies, safety supplies and raw metal. Though fasteners of all shapes and sizes make up more than half of its total sales, Fastenal's other product lines complement its 300,000 varieties of specialty screws, anchors, nuts and bolts and help draw retail customers to its sprawling portfolio of hardware supply stores.

With over 1,800 stores in 50 states and a total of 2,100 across the globe, Fastenal has maintained ambitious plans for growth. Over the last decade it has posted a nice 14% growth rate, and the company is now slowing projections for new store growth to 8% annually. But this is only because the company is now focusing on strengthening its sales force, which, according to Morningstar analysts, will increase sales more effectively while requiring less capital reinvestment. Fastenal's stores already dominate rural market positions and can be found in more than twice as many locations as its nearest competitor. And plans to increase the footprint of stores in larger metro areas together with expansions slated for international markets, which currently account for 7% of total revenue, should keep sales growth on par with the stellar results that the company has posted over the last decade.

In 2008 look for the hardware giant to add another 160 new stores to its portfolio, about the same as last year, and remember that the shift to a slower new store growth rate will be compensated with a stronger sales force and solid margin improvement.

CH Robinson Worldwide (CHRW), a transportation logistics provider, was up almost 4 % in January. CHRW is a Minnesota-based freight forwarder that offers third-party logistics solutions and supply chain management. With 214 branch offices spread across Europe, Asia and North and South America, the transportation broker connected over 25,000 shipping customers with 45,000 different carriers in 2006. And unlike many asset-based trucking companies, which have seen revenues drop with declines in freight shipping, CHRW has actually kept its revenue growing at double-digit rates as demand for its brokerage services has kept its margins strong.

About 87% of the company's net income is generated by pairing shipping demanders with carriers looking to utilize excess supply. C.H. Robinson buys cargo space from freight carriers in bulk and provides customs brokerage. CHRW focuses primarily on ground shipping. Motor freight accounts for around 90% of its profits while its intermodal, air and ocean freight businesses each account for about 2% to 4% of gross profits annually. Beyond plain brokerage services, its margins have gained strength through its supply chain management business, which helps companies create a seamless customized distribution process for each client.

In addition, produce sourcing and delivery makes up about 9% of CHRW's consolidated revenues. This is the business that got the firm started in 1905, and it has continued to grow its operations steadily while brokerage services have taken over as the star earnings driver. After acquiring the FoodSource group entities in 2005, CHRW had increased its sourcing capabilities and gained a renewed focus in transporting the fresh produce it buys. Its branded produce, labeled The Fresh 1, is sold to large multi-store grocery retailers, restaurant chains, produce wholesalers and foodservice distributors.

The remaining 4% of revenues come from the company's T-Chek Systems subsidiary, which provides information services for trucking companies. Larger carriers and truck stop chains pay to access the proprietary information system for management information, sales and fuel cost data, fund transfers, and invoicing of fuel, cash advances and other fees. Fuel cards correlate with T-Chek's expansive network to connect truckers and their managers with C.H. Robinson's routing services and provide an integrated business operation on the road.

If you read the labels of products that you purchased the last time you swung through Home Depot, you would probably find that RPM International (RPM) is on at least one of them. The Ohio-based specialty chemicals manufacturer has diversified product lines that include high-quality specialty paints, protective coatings and roofing systems, sealants, adhesives and specialty chemicals for both industrial and consumer markets.

Its industrial products made up about two-thirds of the company's $3.3 billion in sales last year. These products have a much larger customer base than its consumer division's products, which are sold primarily in North America. Marketing efforts in 149 countries has kept the industrial division from feeling the woes in the U.S. real estate market, and demand for many of its non-residential industrial products has remained high throughout the housing bust. Some of RPM's well-known industrial brands include Dryvit insulation finishing systems, Tremco roofing systems, Alumanation roofing coatings, Stonhard commercial floor coatings, Kop-Coat industrial lumber treatments and Euco concrete admixtures.

On the other hand, the company's consumer segment manufactures and markets do-it-yourself products that focus on home improvement, automotive maintenance and leisure. These are the products that you find at your hardware store that have well-known brand names in very unglamorous applications. They are sold under labels such as Rust-Oleum and Stops-Rust, DAP caulks and sealants, Zinsser primer-sealers, Perma-White mildew-proof paint and Wolman deck coatings. And while you might assume that this is a bad time to be selling products so closely tied to housing, the division has actually posted strong sales growth on its maintenance and repair products. Most of their applications are somewhat insulated from slowing new-construction starts as people focus on fixing up their current homes rather than buying new ones.

RPM's second-quarter sales and net income reached record levels on increasing strength from its industrial segment. Overall sales grew 11.9% to $906 million from the $809 million that it reported in the same period last year, and net income increased 3.6% to a record of $54.9 million. Sales in the industrial segment rose 14.5% to $605.2 million from $528.6 million, while its consumer unit also posted healthy organic growth of 7.0%.

RPM's management said that the results "reflect the impact of new products; the diversity of RPM's end-use markets, many of which are driven by maintenance and repair spending; good expense controls and strong international growth in virtually all of the company's industrial businesses." Management also told investors to expect sales and earnings growth for the year to be in the range of 8% to 10% based on first-half performance and its business outlook for the remainder of fiscal 2008. While that's not exactly spectacular, it would be two to three times better than U.S. GDP growth.

Lately when stocks have traded unevenly, natural gas has kept up its pace in the plus column, even by surging over $9 last week. And I wouldn't be surprised to see prices go above $10 by the time the move is over, potentially lifting funds such as U.S. Natural Gas Fund (UNG).

What's behind the sprint in gas? It's pretty simple, really. Just the old story about supply and demand. Analysts say that the United States needs at least 10,000 megawatts of new power capacity per year to keep up with a 2% annual increase in the demand for electricity. In response, you may recall that a couple of years ago, there was a movement afoot to build a lot of new electricity plants in the United States powered by so-called "clean" coal and nuclear power. But this move hasn't worked out the way that the advocates of those two fuels had planned, as environmentalists and other special-interest groups have blocked efforts to develop these plants at every turn. It seems that coal-burning plants create a lot of carbon that must be offset in ways that are prohibitively expensive.

So instead, utilities have returned to natural gas, a clean-burning fuel that no one seems to complain about as much. Plus, it is plentiful in North America and is more popular than other alternatives like wind, solar and ocean power. Utilities are supportive of the shift to natural gas, because natural gas plants are easier to build, emit less carbon per unit of energy and generally slip under the radar. Even environmentalists know that they need to plug in their latte machines somehow, so they like this alternative power source, too. And now the latest figures suggest something like 7,800 new megawatts of gas-powered electricity came online last year, and at least 10,000 more megawatts will be lit up in each of the next 10 years.

As demand for natural gas strengthens in the next few years, you can bet that the prices will rise. Right now, though, the cost of natural gas had fallen quite a bit since the spike to $15 per million British thermal units, or BTUs, that followed Hurricane Katrina. By the middle of last year, the price rock-bottomed at $6, and now it is climbing back up.