Colfax Corp. (CFX) Looks Headed for a Breakout

Colfax Corporation (CFX) is a diversified technology firm that produces welding equipment and medical devices. Its fabrication technology unit is a leading manufacturer of equipment and consumables used in welding, cutting, and joining applications…

Colfax Corporation’s (CFX) medical technology segment makes medical devices, including orthopedic braces, reconstructive implants, and other products used for rehabilitation, physical therapy, and pain management.

The company is benefiting from its focus on product innovation, a healthy business system, and its cost-cutting initiatives. This led to a strong quarter, where CFX outpaced both its earnings and sales estimates. CFA has a current ratio of 1.6, which indicates it has more than enough liquidity to handle short-term debt.

In terms of growth, its EBIDTA has grown an average of 48% a year over the past three years. Plus, analysts forecast earnings to rise 34.1% year over year in the current quarter. This has led to a Growth Grade of A in our POWR Ratings system.

Based on its forward P/E of 21.41, its stock appears a tad overvalued. The stock showed bullish momentum from November to March, but performance has been mixed since, as shown in the chart below.

Take a look at the 1-year chart of CFX below with added notations…

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