Is Colfax a buying opportunity?

September 18th, 2014 Comments off

Investors in Colfax Corp. (NYSE: CFX) learned something new in the past months: weakness of the stock price!

After the company missed expectations in their Q2 2014 results due to weakness in some of their markets the stock price receded from an all time high of $75.37 down to less than $62 in these days.
Is it a buying opportunity? Insiders think so and bought on several occasions within the last months.
Colfax stock certainly is not cheap but it never was all the way up to ten-bagger status for readers of this blog! Today it is trading at a p/e FY 2015 of 20.

The fluid handling market will recover and Colfax business model of permanent improvement of their operations together with the successful integration of acquired businesses is working better than ever.
Expect above average growth potential which justifies an above average price of Colfax stock!

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Markel – steady as it goes

August 11th, 2014 Comments off

Markel Corporation (NYSE: MKL) released its Q2 2014 results.

The conference call transcript as always is made available by Seeking Alpha.

The insurance group reported book value per common share outstanding of $511.28 at June 30, 2014, up 7% from $477.16 at December 31, 2013.

The combined ratio was 101% for the second quarter of 2014 compared to 103% for the second quarter of 2013. The combined ratio was 98% for both the six months ended June 30, 2014 and 2013.

Markel made very good progress integrating the Alterra and the Hagerty Insurance acquisitions which explains that total operating revenues grew 35% to $2.5 billion in 2014 compared to $1.9 billion in the first half of 2013 and earned premiums increased 42% to $1.9 billion.

Excellent news came from their investment activity:

During the first half of 2014, the total return from the portfolio was 4.6% with equities up 8.6% and fixed income up 3.5% Recasting of the investment portfolio they picked up in the Alterra acquisition is largely complete. They have reset the fixed income portfolio, largely eliminated the high cost alternative investment activities and continued the process of building up the equity investments. Equities now represent 51% of shareholders’ equity up from 48% at year end and this percentage will continue to climb over the next years.

Perhaps the most interesting comments were made on „Markel Ventures“:

The contribution from this segment is still rather poor.

During the first six months of 2014, revenues from Markel Ventures were $355 million compared to $314 million a year ago. Net income to shareholders from Markel Ventures was just over $5 million in 2014 compared to $10.5 million for the same period in 2013.

As chief investment officer Thomas Gayner explains the manufacturing operations within the Ventures Group are lumpy businesses where big orders come irregularly and make a big difference on the bottom-line

Therefore they set high hopes into the Cottrell acquistion, the leading manufacturer of car hauling in the US.

The initial consideration for Cottrell is $130 million and this is the largest transaction yet for Markel Ventures.

With this addition, revenues of the Markel Ventures companies will now round to $1 billion, about 20% of Markels total revenues and they expect double-digit EBITDA profitability.

The market reacted negatively to these results and the stock fell to $ 632. But we are convinced that patient investors will be rewarded over the long term.

Fortunately Markel does not only depend of their insurance results. The investment portfolio especially the equity part is very promising and key to further development will be „Markel Ventures“ ability to acquire companies like Cottrell! Markel’s stock trades at a price/book ratio of only 1.2 ! That’s not expensive at all – Markel remains a buy!

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100% elektrisch – fahren Sie mal Probe mit der Zukunft!

July 30th, 2014 Comments off

Anlässlich einer Road Show von Tesla Motors machten wir eine Probefahrt mit dem Tesla Model S: Ein toller Eindruck!

Nicht nur das wir jetzt verstehen, warum dieses Auto die besten Kundenbeurteilungen erhält, und zwar von allen Autos seiner Klasse, nicht nur den elektrischen. Hier ist ja im Internet schon viel diskutiert und beschrieben worden.

Es ist auch ein spannendes Gefühl, wie unmittelbar der Wagen auf das Gasgeben eh.. ich meine Watt geben reagiert, nicht die geringste Verzögerung wie sie bei Diesel- oder Benzinfahrzeugen normal ist.

Völlig neu ist auch die Beziehung Hersteller – Kunde! Tesla Motors verkauft seine Fahrzeuge direkt ohne Händler an die Kunden.

Zum ersten Mal hat hier der Kunde das Gefühl, der Automobilhersteller interessiert sich weiter für den Kunden, wenn einmal der Wagen gekauft ist!

Tesla Motors (NMS: TSLA) wird morgen über seine Q2 2014 Zahlen berichten. Möglicherweise gibt es auch schon neuere Informationen zum Bau der Gigafactory für Batterien. Interessant wird es in jedem Fall!

 

Hier kommt der neue Ess-Trend!

July 28th, 2014 Comments off

Zwei zufriedene Kunden (.. naja … genauer gesagt eine, die Kleine ernährt sich noch aussschliesslich von Milch …) kommen gerade aus dem letztes Jahr eröffneten Chipotle Mexican Grill im Frankfurter Skyline Plaza Shopping Center!

Chipotle Mexican Grill (NYSE: CMG) ist Vorreiter in der Welle des “Sich gesünder ernähren” und verwendet nur Fleisch von natürlich aufgezogenen Tieren, eben “Food with Integrity”.

Ausserdem sind seine Lokale architektonisch chic und bieten bequemere Sitzmöglichkeiten als beispielsweise McDonalds und repräsentieren den neuen Typ des “Fast Casual Restaurant” im Unterschied zum herkömmlichen “Fast Food”!

In Europa kann man diese Kette erst in London (3 Restaurants), Paris und Frankfurt/M. (je 1 Restaurant) ausprobieren.

Also, wer in einer dieser Städte ist, nichts wie ‘rein und testen!

Chipotle Mexican Grill hat gerade phänomenale Q2 2014 Zahlen vorgelegt, worauf die Aktie einen kräftigen Sprung nach oben gemacht hat und leider jetzt nicht ganz billig ist!

Aber mit Geduld kommt sicher noch ein besserer Einstiegszeitpunkt, um bei diesem wichtigen Trend unserer Zeit auch als Investor dabei zu sein!

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

July 21st, 2014 Comments off

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 Comments off
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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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