The Misfits: Snap-On Incorporated (SNA)

How selling something as simple as selling hand tools to professionals has become a high-return.

Ramon Casas and Pere Romeu in an Automobile, Ramon Casas, 1901, oil on canvas, (Museu Nacional d'Art de Catalunya)

One element of writing and investing I find particularly challenging is not to lose sight of the main goal. We can often get distracted by side quests or by adding unnecessary layers of complexity.

I created this newsletter to highlight companies that don’t get enough investor attention despite spectacular performance. However, I have drifted away from this main goal and now look for some of the most unknown companies doing well. You can only do this for so long before you run out of relative unknowns.

So, I’m going to tack back to my roots and focus on a company that is more well known, but doesn’t get nearly as much attention as it should: Snap-On Incorporated (NYSE: SNA).

Snap-On is a toolmaker that seems pretty easy to understand. How complex can it be to sell tools to mechanics and professionals, right? As you peel back the layers in its financial and proxy statements, you find a slightly more complex business model that explains how it has more than doubled the S&P 500 over the past 40 years.

Let’s dig into what makes Snap-On tick and whether it can continue its stellar performance for the next 40 years.

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