Incorporated in 1987, Amphenol Corporation (APH - Free Report) 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.
Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains. Demand continues to be strong in the automotive, industrial, mobile networks and military markets. The diversification in end markets, with a consistent focus on technology innovation and customer support through all phases of the economic cycle enabled the company to post solid performances over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.
Let us have a look at the reasons that make the stock a must buy at the moment.
Solid Rank & VGM Score
Amphenol currently has a Zacks Rank #2 (Buy) and a Value Growth Momentum Score (VGM Score) of ‘B’. Our research shows that stocks with a VGM Score of ‘A’ or ‘B’ combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Consequently, Amphenol appears to be a solid investment proposition at the moment.
Over the last three months, Amphenol’s current-quarter estimates increased from 70 cents to 72 cents per share while that for the current year increased from $2.90 to $2.95. With positive estimate revisions, investor sentiments clearly appear to be bullish on the stock.
Year-to-Date Price Performance
Year to date, Amphenol’s shares have performed relatively better than the Zacks categorized Electronics-Connectors industry with an average return of 12.5% compared with an 11.5% gain for the latter. Despite a challenging macroeconomic environment, Amphenol reported better-than-expected results for first-quarter 2017. Adjusted earnings came in at 71 cents per share, higher than the year-ago tally of 59 cents. In addition, the figure also beat the Zacks Consensus Estimate of 66 cents. First-quarter revenues came in at $1,560.1 million, up 7.5% year over year and surpassed the Zacks Consensus Estimate of $1,516 million.
Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. It also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
For full-year 2017, Amphenol expects sales in the range of $6.405 billion to $6.525 billion, representing a year-over-year increase of 2–4%. The company expects GAAP earnings per share in the range of $2.91 to $2.97, an increase of 11–14% year over year. We believe that such moves along with its robust operating platform and an efficient management team will help in the execution of its strategic priorities and drive net asset value.
Other top stocks in the industry include Altra Industrial Motion Corp. (AIMC - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Graco Inc. (GGG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial topped estimates thrice in each of the trailing four quarters with an average positive earnings surprise of 15.9%.
Applied Industrial has a long-term earnings growth expectation of 12%. It surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 9.8%.
Graco has a long-term earnings growth expectation of 10.3%. It surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 13.9%.
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