Year 2018 has been troubling for industrial machinery industries. Headwinds emanated from disrupted trade relations between the United States and China due to the imposition of import tariff by the United States, higher freight charges, shortage of skilled workers, inflation and many more. The Zacks Industrial Products sector — currently at the bottom 38% of the Zacks sector list of 16 sectors — declined roughly 25.7% year to date.
Notwithstanding the adverse aspects, there are many stocks that can be considered as good options for investment purposes currently. One such stock is Colfax Corporation (CFX - Free Report) . This Fulton, MD-based provider of products and services related to air and gas handling, and fabrication technology market currently carries a Zacks Rank #2 (Buy) and a favorable VGM Score of A.
Colfax belongs to the machinery sub-industry, which has companies that primarily work for general industries. This industry is positioned in the top 31% of more than 250 Zacks industries. We believe that infrastructural developments, innovative investments, lower taxes on account of implementation of the U.S. Tax Cuts and Jobs Act, growing manufacturing activities and strengthening housing market are a few factors that are boons for the industry. In the past month, the company’s stock price has declined 19% versus 11.4% fall recorded by the industry.
Note: Per our research, the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Below we discussed why Colfax is currently a worthy investment option.
Robust Performance & Impressive Bottom-Line Outlook: Colfax has been keeping its earnings streak alive for quite some time now. The positive earnings surprise of 3.85% in the last report quarter was the 12th consecutive quarter of better-than-expected results.
The company is anticipated to fair well in 2018 and 2019 as well. It has an Earnings ESP of +0.12% for 2018 and +2.00% for 2019. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Further, the company’s earnings estimates have been raised by brokerage firms, indicating bright prospects ahead. In the past 30 days, estimates for 2018 have been raised by three firms and lowered by one while estimates for 2019 have been increased by five and lowered by none. Currently, the Zacks Consensus Estimate for earnings pegs $2.26 for 2018 and $2.66 for 2019, reflecting growth of 0.4% and 3.9% from the respective 30-day-ago tallies.
Colfax Corporation Price and Consensus