Healthier demand in manufacturing and heavy industry is positive tide that is lifting a lot of boats these days, and Colfax (CFX)
too is seeing some benefit. While the company continues to go through a
painful adjustment process in its Air & Gas Handling business, the
trend should start to improve relatively soon and there seems to be room
for more growth in multiple end-markets. Management also seems to be
more inclined to restructure and buy back shares rather than add a new
business group, and that looks like a smart decision on balance for the
time being.
I’ve been clear in the past that I have
serious doubts about this business; I am not sold on the long-term value
of the Air & Gas Handling business and I think the company will
struggle to make real headway in welding. That said, low expectations, a
relatively high short ratio, and improving end-market trends, coupled
with what looks like responsible decisions on the part of management,
does support value here even after a decent run over the past couple of
months.
Read more here:
A Better Quarter From Colfax, But Plenty Of Work Still To Do
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