Positive reactions to a series of events in the last fortnight
prompted shares of
) to reach a new 52-week high of $70.36 during the trading
session on Feb 19. The new 52-week high reflects an increase over
$69.81 reached on Feb 13.
ALTRA HOLDINGS (AIMC): Free Stock Analysis
BARNES GRP (B): Free Stock Analysis Report
COLFAX CORP (CFX): Free Stock Analysis Report
MIDDLEBY CORP (MIDD): Free Stock Analysis
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Colfax Corporation closed the trading on Feb 19 at $69.58. The
trading volume for the session was 0.87 million shares. The
company provided a solid year-to-date return of 63.6%. It is a
diversified industrial manufacturing and engineering company and
currently holds a Zacks Rank #3 (Hold). Strong fundamentals of
the company along with solid earnings growth expected for 2014
and 2015 warrants further upside potential for Colfax.
Colfax Corporation reported impressive fourth-quarter 2013
results on Feb 6. Adjusted earnings per share were 59 cents, way
above the year-ago quarter's earnings of 33 cents. However,
bottom-line result was in line with the Zacks Consensus Estimate.
Revenue increased 14% driven by solid organic growth and
contribution from acquisitions. Gas and Fluid Handling and
Fabrication Technology segments reported 10% and 3% revenue
growth respectively. Backlogs were strong at $1.6 billion, while
orders grew 5.3%. Adjusted operating margin expanded 190 basis
points to 10.6%.
For 2014, Colfax anticipates organic revenue growth in the range
of 1-3% and earnings per share are anticipated within the
Acquisitions remain an integral part of Colfax's expansionary
policy. Within a week of releasing its fourth-quarter 2013
results, the company agreed to acquire Irving Place Capital's
Victor Technologies Holdings, Inc. for $947.3 million, including
assumption of debt. Victor is a renowned manufacturer of advanced
cutting, gas control and specialty welding solutions. These
assets will compliment the company's ESAB business and will help
its expansion in new markets and applications. Colfax anticipates
the transaction to be accretive to adjusted earnings per share
and free cash flow immediately.
To fund this acquisition, Colfax has offered to the public 8
million common shares (versus the earlier offer of 6.5 million)
at $68.75. Also, holder of the company's Series A Perpetual
Convertible Preferred Stock, BDT CF Acquisition Vehicle, LLC, has
opted for the conversion of its preferred shares holding into
equity shares of the company.
Impressive fourth-quarter 2013 results along with acquisition
announcement and public offering of common shares have driven the
company's share price up by 9.5% since Feb 6.
Earnings Growth Rates Show Potency
The Zacks Consensus Estimate for Colfax Corporation is at $2.59
for 2014 and $3.13 for 2015, reflecting year-over-year growth of
27.1% and 19.6% respectively. Also, earnings in the next five
years are expected to grow by 18.1%.
Colfax currently has a market capitalization of $7.1 billion.
Some better-ranked stocks in the industry include
Altra Industrial Motion Corp.
Barnes Group Inc.
), all of which carry a Zacks Rank #2 (Buy).