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What: Shares of pumps and fluid-handling products manufacturer Colfax
So what: The culprit here appears to be its fourth-quarter earnings, which missed Wall Street expectations. Higher acquisition-related expensing resulted in Colfax reporting a $0.40 profit on $177.8 million in sales. The consensus expectation was for a profit of $0.45 on $189.7 million in revenue. Management feels confident that its acquisition strategy and the synergies it will realize from those combinations will result in savings of $100 million each year.
Now what: Colfax still has a lot of work to do, from what I can tell. Management spoke of $100 million in synergies, but also warned that implementing those cost-cutting measures won't be a walk in the park. Said CEO Clay Kiefaber: "this organization is operating way below its collective capability." That's all you need to know about Colfax right now. Wait for the company to get its act together and perhaps then we can give it another look.
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.