Back to top

Image: Bigstock

Amphenol Remains Poised for Growth with Strategic Moves

Read MoreHide Full Article

On Nov 25, Zacks Investment Research updated the research report on diversified electronics manufacturer Amphenol Corporation (APH - Free Report) .

Amphenol designs and manufactures connectors and interconnecting systems that are used primarily to transmit electrical and optical signals for a wide range of sophisticated electronic applications.

The company has a significant presence in the fast-growing commercial aerospace market. It is also well positioned to capitalize on the proliferation of electronics content on next-generation planes. These advanced electronic systems need updated technology interconnect solutions in order to enhance fuel efficiency and improve passenger experience. This provides Amphenol ample growth opportunities.

The ongoing revolution in electronics allows Amphenol to capitalize on the opportunities and makes its position stronger in the market. Further, the company expects to leverage on the solid growth potential of the companies it has acquired to drive robust performance in the future.

In order to stimulate further growth, Amphenol aims to continue making acquisitions on a global basis in the high-growth segments with complementary capabilities from a product, customer and/or geographic standpoint. It acquired SGX Sensortech, a Switzerland-based manufacturer of air quality sensors that are used in a variety of automotive and industrial applications. It has annual sales of approximately $15 million. The acquisition is expected to be accretive to Amphenol’s earnings, going ahead.

In addition, the company’s top-line growth is benefiting from improved end-market demand, new product rollouts, and market share gains. Demand in automotive industrial and mobile networks, and military markets continue to be strong. The diversification in end markets with focus on technology innovation and customer support through all phases of the economic cycle further allow the company to post strong results. A sustained drive for geographic and market diversification has enabled Amphenol to extend its presence to new customers and new applications.

Amphenol currently carries a Zacks Rank #2 (Buy). Some other favorably ranked stocks in the same space include Applied Industrial Technologies, Inc. (AIT - Free Report) , Ingersoll-Rand Plc (IR - Free Report) and Parker-Hannifin Corporation (PH - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Industrial has long-term earnings growth expectations of 12% and is currently trading at a forward P/E of 23.3x.

Ingersoll-Rand has a positive earnings surprise history with an average of 12.9% in the trailing four quarters, beating estimates in each.

Parker-Hannifin has a positive earnings surprise history with an average of 10.5% in the trailing four quarters, beating estimates in each.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

Published in