Shares of Amphenol Corporation (APH) hit a 52-week high of $53.76 on Nov 28, 2014. However, the stock closed the session at $53.63, which reflects a solid year-to-date return of 23.0%.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has enough fundamentals that may further drive the stock upward. Currently, the stock is trading at a forward P/E of 24.3x and has long-term earnings growth expectation of 11.7 %.
Growth Drivers
Impressive third-quarter 2014 results, coupled with new product rollouts, technology leadership, market and geographic diversification were the primary driving factors for the stock.
On Oct 22, 2014, Amphenol reported net income of $182.2 million or 57 cents per share compared with $160.8 million or 50 cents a share in the year-ago quarter. Quarterly revenues were record high at $1,358.7 million in third-quarter 2014, up 17.8% year over year and exceeded the Zacks Consensus Estimate of $1,341 million.
Amphenol is bullish about the proliferation of new electronic products in most of its end markets. The diversification in end markets with a consistent focus on technology innovation and customer support through all phases of the economic cycle allows the company to gain momentum in stock prices. Also, the company remains bullish about its revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on these opportunities and strengthen its position in the market.
For full-year 2014, management increased its revenue guidance from $5.210 billion and $5.270 billion to $5.260 billion and $5.300 billion, representing a year-over-year rise of 14%–15%. Recurring earnings per share for 2014 is pegged in a band of $2.20 to $2.22, up from earlier projections of $2.17 to $2.20, representing a year-over-year increase of 14%–15%.
Other Stocks to Consider
Amphenol currently has a Zacks Rank #3 (Hold). Other stocks worth considering in the industry include CoreLogic, Inc (CLGX), FTI Consulting, Inc (FCN) carrying a Zacks Rank #1 (Strong Buy), and CBIZ, Inc (CBZ), each carrying a Zacks Rank #2 (Buy).
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