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Colfax share price – expensive or not ?

February 16th, 2012

Colfax share price went down after the release of FY 2011 results but suprisingly only for one single day. Then a lot of buying interest pushed the stock price up to $ 35 these days.

So is Colfax stock cheap or expensive? …difficult to answer!

The Charter acquisition is the biggest step ahead in the history of Colfax:

Revenue will jump from $ 693 mil in FY 2011 to about $ 4 bil in FY 2012!

The company’s guidance for the coming year is EPS of $ 0.41 – 0.57 or EPS of $ 1.45 – 1.65 adjusted by most expenses, also the acquistion related ones.

If we assume the company only reaches the lower end of adjusted EPS guidance the stock trades at a p/e of 24 which is not exactly cheap.

The one and only question certainly is: will they be able to restructure Charter successfully in 2012 and beyond? Will they be able to implement the Colfax Business System to their biggest acquistion so far?

They already proved several times with smaller acquistions that they are perfectly capable of doing that, but again, Charter is the biggest nut to crack.

So at this point you need some help to decide?

Insiders are buying the stock in these days. And among them are the Rales brothers, founders of Colfax and of Danaher group, the company from which Colfax got their „Colfax Business System”!

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