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Analyst Blog

Shares of Colfax Corporation (CFX - Analyst Report), a manufacturing and engineering company hit a 52-week high of $49.99 on May 20 and eventually closed at $49.40. The shares of this company have been gaining momentum since it reported solid first quarter 2013 results on Apr 25.

Year-to-date, share price has recorded a healthy return of 23.3%. The company’s long-term estimated EPS growth rate is 28.5%. Average volume of shares traded over the last three months came in at approximately 1,314K.

Solid First Quarter Performance

Colfax posted strong first-quarter results with adjusted earnings per share of 26 cents, beating the Zacks Consensus Estimate of 24 cents per share by 8.33%. Earnings also grew 13.0% year over year, due to improved sales and margins in the quarter.

Revenue was reported at $947.1 million, up 6.8% year over year. The main reason for increased revenues was the $105.2 million contribution from various acquisitions, which was slightly offset by a drop in the existing business accompanied by foreign currency adjustments.

Colfax also experienced a hike in margins with gross margin increasing 340 basis points to 30.7% year over year. SG&A, as a percentage of sales, was 22.4%, against 23.9% in the first quarter of 2012. Colfax’s adjusted operating income margin expanded 120 basis points year over year to 8.1% in the quarter.

In view of the same, Colfax maintained its revenue guidance in the range of $4.175 billion to $4.25 billion with an organic revenue increase of 1% to 3%. Moreover, Colfax is expected to witness a hike of 27.0% to 42.0% in its earnings per share for 2013 and lie in the range of $1.70 to $1.90.

Roughly 75.0% of the estimates have been revised upward for the years 2013 and 2014, subsequent to the earnings release. Over the last 30 days, the Zacks Consensus Estimate has risen 5.9% to $1.97 for 2013, while escalating 3.7% to $2.50 for 2014.

Other Stocks to Consider:

Colfax currently carries a Zacks Rank #2 (Buy). Other stocks worth a look in the industry are Graco Inc. (GGG - Snapshot Report) and Tri-Tech Holding, Inc. ; each holding a Zacks Rank #1 (Strong Buy). Also, Altra Holdings, Inc. (AIMC - Snapshot Report) carries a Zacks Rank #2 (Buy).

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