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Colfax Corporation Stock Upgraded (CFX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Colfax Corporation (NYSE: CFX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 20.1%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 126.2% when compared to the same quarter one year prior, rising from -$105.60 million to $27.64 million.
  • Net operating cash flow has significantly increased by 87.72% to -$13.41 million when compared to the same quarter last year. Despite an increase in cash flow of 87.72%, COLFAX CORP is still growing at a significantly lower rate than the industry average of 260.54%.
  • Powered by its strong earnings growth of 115.78% and other important driving factors, this stock has surged by 76.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • COLFAX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COLFAX CORP swung to a loss, reporting -$1.09 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus -$1.09).
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Colfax Corporation, a diversified industrial manufacturing and engineering company, provides gas- and fluid-handling and fabrication technology products and services to commercial and governmental customers worldwide. The company has a P/E ratio of 80.5, above the S&P 500 P/E ratio of 17.7. Colfax has a market cap of $5.07 billion and is part of the industrial goods sector and industrial industry. Shares are up 23.7% year to date as of the close of trading on Tuesday.

You can view the full Colfax Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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