Colfax released decent Q2 2019 results
Colfax Corp. (NYSE:CFX) our conglomerate in transition since it acquired the medical device sector released Q2 2019 results.
The medical device sector grew sales by 3%, fabrication technology grew sales by 6%.
Net loss in the quarter was $466.6 million or $3.45 per share, which includes a non-cash charge of $3.48 per share for the pending divestiture of its Air & Gas Handling business that is mostly attributable to the recognition of cumulative foreign currency translation effects from the long-term strengthening of the U.S. Dollar.
Excluding the divestiture impacts, strategic transaction costs, restructuring expenses and acquisition-related amortization costs, Colfax reported fully consolidated adjusted net income of $0.64 per share in the second quarter 2019 versus $0.61 in the second quarter of 2018.
Colfax continues to expect its businesses to achieve the previously announced 2019 adjusted EPS guidance of $1.90 to $2.00 from continuing operations.
Those numbers came in better than expected by the market and the stock jumped 15% on Wednesday.
But over the long term it is clearly visible that Colfax Corp. remains a slow grower and the development of the stock price reflects that.
Q2 numbers show that the divestiture of the Air & Gas Handling sector and the acquisition of the medical device unit did not improve growth rates. And most probably this will not change in the future!
One just has to watch Johnson & Johnson (NYSE:JNJ) with its growth problem in the medical device section. But they have a strong pharmaceutical section which drives the growth.
Therefore we recommend to sell Colfax shares now! There are more interesting investment opportunities in the stock market!
This blog follows Colfax Corp. since May 2009 when the share price of Colfax stood at $7.27
Readers who bought at that time can now realize a capital gain of 258% at a stock price of $26 – not so bad!
This blog will stop following Colfax and start to follow another more interesting stock soon!
So stay tuned!