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Amphenol Corporation

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Amphenol reported impressive first-quarter 2018 results. Both earnings and revenues increased on a year-over-year basis driven by an improved end-market demand, new product rollouts, and market share gains. Management raised full-year 2018 guidance based on strong organic growth coupled with material contribution from acquisitions. End-market strength particularly in the industrial, commercial aerospace and military sectors bode well for the company. Nevertheless, the company is susceptible to volatility in foreign exchanges, which undermines its growth potential. Bulk of the company’s revenues comes from sales to the communications industry, which is a concern. Furthermore, increasing cost of raw materials is a matter of concern and is likely to be an additional drag on its profitability. Shares have underperformed the industry on a year-to-date basis.

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