Trade-Ideas LLC identified

Colfax

(

CFX

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Colfax as such a stock due to the following factors:

  • CFX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.3 million.
  • CFX has traded 83,474 shares today.
  • CFX is trading at 3.24 times the normal volume for the stock at this time of day.
  • CFX is trading at a new low 4.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CFX:

Colfax Corporation, an industrial manufacturing and engineering company, provides gas- and fluid-handling, and fabrication technology products and services worldwide. The company operates in two segments, Gas- and Fluid-Handling, and Fabrication Technology. CFX has a PE ratio of 22. Currently there are 4 analysts that rate Colfax a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Colfax has been 1.3 million shares per day over the past 30 days. Colfax has a market cap of $3.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.15 and a short float of 6.8% with 6.66 days to cover. Shares are up 23.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Colfax as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.97 is somewhat weak and could be cause for future problems.
  • 35.53% is the gross profit margin for COLFAX CORP which we consider to be strong. Regardless of CFX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.16% trails the industry average.
  • Net operating cash flow has decreased to $151.68 million or 17.67% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Machinery industry and the overall market, COLFAX CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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