Colfax Corporation (CFX)

[magness]

q3 results
What a terrible set of results. Listened to the conference call hoping for some silver lining to theses dark clouds. Only got more darker clouds. Stock fully deserved the 10% fall the day before yesterday. I suspect the fall is not done, the $100m buyback will provide some relief, but cannot see anyone wanting to bet on this company in the long term. The stock has hit a 3 year low and will attract some bottom fishers, so that should also provide some short-term support. The management only offered bland excuses as to what is happening and how they will fix it. I expect we will see earnings estimates taken down ,and the stock downgraded shortly. It's hard to know what multiple to put on the earnings here, but giving it a very hopeful 15 times, and next years GAAP earnings of (my estimate) $1.20, we are taking a stock price of $18. My earnings number is lower than current published estimates, but management say it will be 2017 before any improvement from the current run rate, and there are lots more restructuring costs to hit the P&L. I hope I am being too pessimistic as I feel for those people who bought this stock at $70+ a year ago. However I see in the cash flow analysis that provision for Managements stock-based compensation was $12M, so at least someone is doing well. The next week will be interesting as the analysts update their models, and their recommendations.