In multiple past articles on Colfax (CFX)
I took management to task for the state of the business, including
questionable long-term value in the Air & Gas Handling business, an
unimpressive turnaround with Fab Tech, and a need to do something more
transformative with the business mix. Since my last update, the company has made some significant announcements, led by the $3 billion-plus acquisition of DJO Global and the impending sale of the Air & Gas Handling business.
Although
I think management’s growth expectations for DJO Global may be too
high, this non-cyclical business should generate some solid cash flow
and the AGH sale will reduce some of Colfax’s cyclicality. Top-line
growth will still be a challenge, but better margins and a more stable
business mix should be rewarded with a better multiple, and today’s
multiple is not demanding.
Read more here:
Colfax Logs A Stable Quarter Amid Significant Transformation
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