Colfax Q2 2014 results were slightly disappointing but the big picture hasn’t changed!

July 21st, 2014 No comments

Colfax Corp. (NYSE: CFX) the industrial manufacturing and fluid handling company released its Q2 2014 results which came in a bit short of analysts expectaions.

Adjusted net income per share were $0.48 and net sales increased 11.7% to $1.199 billion but declined organically by 5.0%.

As always Seeking Alpha published the conference call transcript.

There were weeknesses due to soft demand in welding and pumping markets, as well as certain issues in fluid handling as CEO Steven E. Simms pointed out but the recent acquisitions performed generally in line with expectations.

So how did Colfax react to these difficult markets? They applied their Colfax Business System (CBS) tools in a rigorous way to realize additional cost savings.

At the Vamberk site in the Czech republic e.g. the ESAB business established an electronic pool system delivers direct to the customer, bypassing any warehouse or distribution centers.

Nevertheless for the balance of the year Colfax decided to reduce their 2014 guidance because sales in the fabrication technology and in the fluid handling business were below expectations.

But don’t get confused or disappointed!

All this means only temporary weekness for Colfax and as some of their markets are a bit soft they continue to apply their CBS tools and reduce costs more rigorously than ever!

Their balance sheet is strong, the debt level is reasonable. This enables them to continue to acquire and integrate opportunistically when occasions arise.

Colfax share price ended Friday at $ 67.67

Colfax is a buy for the long term investor even if it is not exactly cheap … but quality rarely is!

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Colfax reported Q2 2014 results below estimates

July 18th, 2014 No comments
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Welcome to the new and much bigger Markel !

May 9th, 2014 Comments off

Markel Corporation (NYSE: MKL) reported their Q1 2014 results and held the usual conference call. The transcript has been published by Seeking Alpha.

Markel is rapidly integrating all Alterra business lines and is now aggregating the underwriting results in 4 segments:

U.S. Insurance, International Insurance, Reinsurance and Other Discontinued Lines.

And increasingly, they are not thinking legacy Alterra or legacy Markel, they are just thinking „our company“, as CFO Anne Waleski put it on the conference call. Therefore it will be more difficult each quarter to separately identify and quantify legacy Alterra results.

Earned premiums increased 68% to $949 million for the first quarter of 2014. The increase in 2014 was driven by the inclusion of the full quarter of legacy Alterra product offerings included in each of the three ongoing underwriting segments, as well as a full quarter from the Hagerty business.

The consolidated combined ratio for the first quarter of 2014 was 95% compared to 91% a year ago. This reflects among other factors the application of a more conservative loss reserving philosophy to legacy Alterra product offerings.

The results of Markel Ventures were a bit disappointing but CIO Thomas Gayner attributed this to seasonality.

Revenues were $171 million compared to $162 million a year ago. Net income to shareholders for the period was just over $1 million in 2014 compared to $3.6 million for the first quarter of 2013.

The all important metric in the insurance industry, book value per share increased 4% since the end of 2013 to $493.96 a share.

Good news came from the investment portfolio: the overall investment return for the first 90 days of the year was a positive 2.0%, with equities up 3%, and fixed income up 1.7%.

Perhaps the most exciting information for the long term return of Markel is that equity investments now comprise 49% of shareholders equity up from the roughly 40% level immediately following the Alterra acquisition and over time they will approach a more normal equity allocation of roughly 80% of shareholders equity and equity investments.

Markel yesterday traded at $640.23 which translates into a price/book ratio of 1.3

As we can expect improving results by applying the more conservative standards of Markel to all legacy Alterra business lines and also improving results from Markel Ventures and the equity investments in general, this stock remains a buy!

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Markel reports Q1 2014 results

May 8th, 2014 Comments off

Markel Corporation (NYSE: MKL) released its Q1 2014 results!

Book value per common share outstanding increased by 4% from $477.16 at December 31, 2013 to $493.96 at March 31, 2014!

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Colfax reported good Q1 2014 results!

April 28th, 2014 Comments off

After completing the Victor Technologies Holding acquisition Colfax Corp. (NYSE: CFX) released the Q1 2014 Earnings and hold the Conference Call. Seeking Alpha published the transcript.

Even if adjusted earnings came in 1 ct. short of expectations the results are remarkable!

Sales were up 11% in total reflecting the impact of the acquisitions for gas and fluid handling closed in the fourth quarter of 2013.

Adjusted operating income was $94.1 million representing an adjusted operating margin of 9.8%. Fabrication technologies’ adjusted operating margins were 11.2%. Gas and fluid handling’s adjusted margins were 9.8%

Total orders in the quarter were $583.4 million, up 16.2% year over year, while backlog at the end of the quarter was $1,592.0 million, compared with $1,438.5 million at the end of first-quarter 2013.

Applying its CBS tools Colfax was able to reduce its long-term debt built up to finance the acquisitions to $1.1 billion down from $1.5 billion at the end of 2013.

As a summary CEO Steve Simms pointed out at the conference call, that Colfax „improved operating margins despite a sluggish economic environment and remains confident in achieving both the 2014 targets and the longer term operating profit goals of 13% for ESAB, 17% for fluid handling, and 15% for Howden business including the acquired entities“.

Colfax increased its earnings guidance from $2.40 – $2.65 up to an adjusted earnings per share of $2.45−$2.70 .

This puts the share at a p/e ratio of 27-28.

This is not cheap but Colfax stock never really was cheap up on its way to ten-bagger status for readers of this blog!

The market simply expects Colfax to continue to grow by acquisitions and to improve operational results sometimes dramatically in order to achieve an above average earnings growth rate.

If you are new to CFX and want to build up a position in CFX perhaps the best is to do it „by thirds“ in order to profit from tempory dips in the market!

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Colfax reported good Q1 2014 results!

April 25th, 2014 Comments off

Colfax (NYSE: CFX) yesterday reported good Q1 2014 results!

Have a look at a seasoned serial acqirer!

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Colfax – let’s celebrate a ten-bagger!

April 23rd, 2014 Comments off

This blog started to follow Colfax Corp. (NYSE: CFX) in May 2009 when the stock traded at $7.27 .Today after 5 years it finished the day at $73.70!

Let’s celebrate!

This is a ten-bagger for all our readers who have been invested from the beginning!

Get a nice bottle of champagne!  You and Colfax deserve it!

But don’t forget, the trip is not over yet: Colfax still has a lot of plans for the future!

Stay tuned … after the effect of the champagne has gone, obviously!

 

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Colfax will release its Q1 2014 earnings on April 24th!

April 16th, 2014 Comments off

After completing the Victor Technologies Holdings Inc. acquisition Colfax Corp. (NYSE: CFX) will release its Q1 2014 earnings on Thursday 24th April 2014 followed by the conference call.

Stay tuned!

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We are patiently waiting, Colfax!

March 20th, 2014 Comments off

There were no news from Colfax Corp. (NYSE: CFX) when the stock finished the day at $70.44 in a rather difficult market after the Fed’s policy announcements.

But readers of this blog are not waiting for precise news, they are waiting for an uptick of the stock price of just $2.26!

Yes, that’s exactly what seperates us from “ten bagger“ status!

You will recall the moment when in May 2009 this blog started to cover Colfax Corporation and its stock stood at $7.27 .

Now we are not far away from $72.70 . At that point we will have made ten times our money, a so called “ten bagger“!

Is there anything we can do for now? No, we just have to do what successful investors often have to do:

… nothing, just sit down and wait patiently as the story unfolds!

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Colfax secures financing of the Victor acquisition

February 21st, 2014 Comments off

Colfax (NYSE: CFX) announced that it has sold all 9’200’000 shares of its public offering at $68.75!

According to the prospectus filed pursuant to rule 424 this amounts to proceeds for Colfax of $610.363 mil before expenses.

As Colfax agreed to acquire Victor Technologies for $947 mil in cash they are now able to finance about 2/3 of the deal by equity.

Well done Colfax!

As the acquisition includes the assumption of debt this guarantees a balanced debt/equity financing of the whole deal!

 

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