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Is Colfax Corporation (CFX) A Smart Long-Term Buy?

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Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ first quarter 2021 investor letter – a copy of which can be downloaded here. A return of -5.02% was recorded by its Investor Class: ARTSX, -4.99% by its Advisor Class: APDSX, and -4.95% by its Institutional Class: APHSX for the fourth quarter of 2020, all below the Russell 2000® Growth Index that delivered a 4.88% return and the Russell 2000® Index that was up by 12.70% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Small Cap Fund, in its Q1 2021 investor letter, mentioned Colfax Corporation (NYSE: CFX), and shared their insights on the company. Colfax Corporation is a Annapolis Junction, Maryland-based industrial company that currently has a $5.9 billion market capitalization. Since the beginning of the year, CFX delivered a 14.15% return, extending its 12-month gains to 62.27%. As of May 17, 2021, the stock closed at $44.09 per share.

Here is what Artisan Small Cap Fund has to say about Colfax Corporation in its Q1 2021 investor letter:

"Colfax Corporation is a global manufacturing company providing orthopedic and fabrication technology products and services. Its orthopedic products are focused primarily on injury prevention and recovery, including athletic braces, hot and cold therapy, bone growth stimulators and therapeutic shoes. The fabrication technology division is a leader in welding and cutting solutions such as filler metals, equipment, automation/digital solutions and gas equipment. Management recently reconstructed Colfax’s portfolio of businesses—acquired the orthopedic/medical technology business in 2019, divested its air and handling equipment and fluid handling businesses in 2019 and 2017, respectively. We believe the remaining portfolio will benefit from a near-term rebound in elective medical procedures and welding as the broader economy reopens. We also believe additional med tech acquisitions, margin improvements and market share gains in the fabrication technology division are additional long-term profit cycle drivers. With shares trading at an attractive valuation, we initiated a GardenSM position."

10 Cities with the Worst Air Pollution in the US
10 Cities with the Worst Air Pollution in the US

Moon Light PhotoStudio/Shutterstock.com

Our calculations show that Colfax Corporation (NYSE: CFX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Colfax Corporation was in 36 hedge fund portfolios, compared to 45 funds in the third quarter. CFX delivered a 11.37% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.