There are definitely some valid reasons to like Colfax (NYSE:CFX). Not only is this industrial conglomerate explicitly looking to replicate much of the successful Danaher model, the company has the highest leverage to emerging markets of almost any peer and is likewise leveraged to industries like power generation and oil/gas/petrochemicals where capital expenditures should be strong for several years.
There is a point where enough's enough, though. Colfax shares seem to be pricing in FCF growth of close to 16% (including the recent acquisition of Victor Technologies) and trade at more than 14x 2014 EBITDA estimates. Even allowing that Colfax can be a revenue and profit growth leader in the industrial sector over the next few years, that...
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