Economy Blog » IPO Play Colfax

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Cramer recommended shares of Colfax (CFX), a play on fluid management that recently came public on May 8. Coflax makes makes pumps and transfers liquids for sectors like oil, paper, chemical and shipping. “Think of it as the lubricant that keeps so many markets running smoothly,” Cramer said. Coflax gets 76% of its revenues from abroad and has some big name customers like General Dynamics (GD), Cummings (CMI) and General Electric (GE). Coflax is well diversified with 44% of the company’s sales coming from general industrial, 24% from commercial marine, 15% from oil and gas, 11% from power generation and 6% from the U.S. Navy. Cramer also likes that the Rales brothers hold a 44% stake in the firm. Cramer thinks Coflax should be trading in line with peers like Flowserve (FLS) and Robbins & Myers (RBN). If the company were to fetch a similar valuation as FLS and RBN the stock should advance by 26%. Cramer advised investors to only by this stock during normal trading hours and use limit orders. He also said don’t pay more than $21 per share and wait one week before buying. Cramer called Colfax a gem of a new tech company. “This is your chance to buy it at a decent price,” he said.
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