There are a few people out there that we just admire, and one of them I do is Christopher Hix, whom Colfax Corp. (CFX) named yesterday as its chief financial officer. To me, his appointment is one of those "positive-management-catalyst" events.
As someone who mostly invests in cyclical-growth companies, I've had an opportunity throughout my career to observe lots of company managers as the business cycle proceeds.
When things are going well, lesser managers naively see strong cyclical patterns as secular ones that will continue forever. By contrast, the best executives heed warning that their companies' activities are too robust.
I've learned over time to follow such smart business leaders' careers -- indeed, I think that's a special part of my investing and thesis-creation process. I like to watch talented people navigate their careers as they make job changes, pursue transactions, join boards and manage companies. There are certain executives out there who regularly create shareholder value (at times very meaningfully), and Hix is one of them.
I've watched as he successfully navigated the mid-cap cyclical-industrial landscape, starting with various leadership roles at Roper Technologies (ROP). Hix served as part of the team that built a foundation to what's become one of the most successful industrial-growth companies ever.
The executive then became CFO of Robbins & Myers in 2006, when that firm was just an unknown industrial manufacturer with poor operating performance. Robbins & Myers traded at $10 a share then, but Hix and his colleagues restructured the business, materially improved operating performance and sold the firm to National Oilwell Varco (NOV) for $60 a share just seven years later.
After Robbins & Myers, Hix moved on in 2012 to OM Group, which was a loose conglomeration of specialty-chemical assets that badly needed strategic restructuring. OM's stock was trading in the $15 range, but Hix helped right the ship and private-equity firm Apollo Global Management bought the business for $34 a share last fall.
And now, Hix is joining Colfax Corp. at a beleaguered time in the company's history.
Colfax's proactive board is restructuring management in response to cyclical forces that are creating volatility in CFX's business, which involves the manufacture of gas- and fluid-handling equipment. Forecasting has become challenging for Colfax, whipped around by brisk currency shifts and demand woes in emerging markets.
However, I believe that CFX could actually have a bright future. All that Colfax's far-flung empire of global assets really needs a cultural and reporting upgrade, and Hix can contribute mightily to that effort.
My advice: Watch Colfax from here -- especially with Hix in the front office.