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Colfax (CFX) Offers Senior Notes, Provides Q1 Segmental View

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Machinery company Colfax Corporation recently announced the offering of €350 million senior notes, guaranteed by some of its domestic subsidiaries. It also provided an insight into first-quarter 2017 preliminary segmental trends.

Over the last three months, Colfax’s shares yielded 9.39% return, outperforming 6.75% gain recorded by the Zacks categorized Machinery General Industrial industry.

 

As disclosed, Colfax intends to use the net proceeds from the issuance to repay approximately $301.7 million borrowings under the revolving credit facility and bilateral credit agreements, and for general corporate purposes. The offering will likely be completed on Apr 19. Though such debt issuances satisfy liquidity needs, we believe it makes the company more levered.

In addition to notes offering, Colfax announced that it anticipates solid organic order growth in its Gas & Fluid Handling segment for the first quarter. It predicts better organic revenue growth compared to the previous two quarters. We hope the anticipated positive trend leads to impressive top-line results.

The company is expected to release the first-quarter results on May 2. The Zacks Consensus Estimate for the stock is 29 cents for the first quarter, $1.65 for 2017 and $1.87 for 2018.    

Colfax Corporation Price and Consensus

 

Colfax Corporation Price and Consensus | Colfax Corporation Quote

Zacks Rank & Stocks to Consider

Colfax currently has a market capitalization of $4.9 billion and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Roper Technologies, Inc. (ROP - Free Report) , Altra Industrial Motion Corporation and Graco Inc. (GGG - Free Report) . While Roper Technologies sports a Zacks Rank #1 (Strong Buy), both Altra Industrial Motion and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Roper Technologies’ financial performance was impressive, with an average positive earnings surprise of 0.92% for the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.

Altra Industrial Motion reported better-than-expected results in the last four quarters, with an average positive earnings surprise of 12.49%. Also, its earnings estimates for 2017 and 2018 improved in the last 60 days.

Graco reported better-than-expected results in the last quarter, with a positive earnings surprise of 17.65%. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.

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