We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Colfax (CFX) Stock Up 19.3% YTD: What's Driving the Rally?
Read MoreHide Full Article
Colfax Corporation’s performance has been impressive since the beginning of this year, which is evident from a 19.3% increase in its share price. Strong demand for its products, solid product offerings, buyouts and an impressive cash flow supported positive market sentiments for the company.
The Fulton, MD-based company, with $6.2 billion of market capitalization, belongs to the Zacks Manufacturing - General Industrial industry. The company currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Year to date, Colfax has outperformed its industry’s growth of 7.8% and the S&P 500’s rally of 17.5%.
Factors Favoring the Stock
Colfax is poised to benefit from its focus on product innovation, a solid business portfolio and rising customer demand. The company anticipates witnessing healthy year-over-year increase in sales and earnings in 2021, along with an impressive cash flow. Its ability to generate healthy cash flows allows it to effectively deploy capital for acquisitions and improving organic growth capabilities. Free cash flow is anticipated to be at least $250 million for 2021.
Colfax is focused on strengthening its businesses through the addition of assets. The company’s buyout of LiteCure (December 2020) created strong growth opportunities in the physical therapy and rehabilitation market. Also, its buyout of Trilliant Surgical (January 2021) is likely to enable its DJO Global business to offer comprehensive foot and ankle solutions. Its MedShape buyout (April 2021) is also anticipated to boost its growth opportunities in the reconstructive business. Acquisitions had a positive impact of 1.8% on sales in first-quarter 2021.
Launch of new products like Motion iQ, EMPOWR Partial Knee and AltiVate Anatomic CS Edge, along with the company’s cost control measures, might also be beneficial. In 2020, cost savings of more than $20 million were realized from its restructuring activities, with additional savings of $25-$30 million expected in 2021.
This apart, its focus on improving operational productivity and innovation investments will likely drive its performance in the quarters ahead.
The Zacks Consensus Estimate for Colfax’s earnings is pegged at $2.14 for 2021, up 0.5% from the 60-day-ago figure. The consensus estimate for second-quarter 2021 earnings stands at 53 cents, having moved 1.9% north over the same time frame.
Image: Bigstock
Colfax (CFX) Stock Up 19.3% YTD: What's Driving the Rally?
Colfax Corporation’s performance has been impressive since the beginning of this year, which is evident from a 19.3% increase in its share price. Strong demand for its products, solid product offerings, buyouts and an impressive cash flow supported positive market sentiments for the company.
The Fulton, MD-based company, with $6.2 billion of market capitalization, belongs to the Zacks Manufacturing - General Industrial industry. The company currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Year to date, Colfax has outperformed its industry’s growth of 7.8% and the S&P 500’s rally of 17.5%.
Factors Favoring the Stock
Colfax is poised to benefit from its focus on product innovation, a solid business portfolio and rising customer demand. The company anticipates witnessing healthy year-over-year increase in sales and earnings in 2021, along with an impressive cash flow. Its ability to generate healthy cash flows allows it to effectively deploy capital for acquisitions and improving organic growth capabilities. Free cash flow is anticipated to be at least $250 million for 2021.
Colfax is focused on strengthening its businesses through the addition of assets. The company’s buyout of LiteCure (December 2020) created strong growth opportunities in the physical therapy and rehabilitation market. Also, its buyout of Trilliant Surgical (January 2021) is likely to enable its DJO Global business to offer comprehensive foot and ankle solutions. Its MedShape buyout (April 2021) is also anticipated to boost its growth opportunities in the reconstructive business. Acquisitions had a positive impact of 1.8% on sales in first-quarter 2021.
Launch of new products like Motion iQ, EMPOWR Partial Knee and AltiVate Anatomic CS Edge, along with the company’s cost control measures, might also be beneficial. In 2020, cost savings of more than $20 million were realized from its restructuring activities, with additional savings of $25-$30 million expected in 2021.
This apart, its focus on improving operational productivity and innovation investments will likely drive its performance in the quarters ahead.
The Zacks Consensus Estimate for Colfax’s earnings is pegged at $2.14 for 2021, up 0.5% from the 60-day-ago figure. The consensus estimate for second-quarter 2021 earnings stands at 53 cents, having moved 1.9% north over the same time frame.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Chart Industries, Inc. (GTLS - Free Report) , Helios Technologies, Inc (HLIO - Free Report) and Graco Inc. (GGG - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chart delivered an earnings surprise of 28.92%, on average, in the trailing four quarters.
Helios delivered an earnings surprise of 50.69%, on average, in the trailing four quarters.
Graco delivered an earnings surprise of 28.28%, on average, in the trailing four quarters.