On Mar 28, Zacks Investment Research updated the research report on diversified electronics manufacturer Amphenol Corporation APH.
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 remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content on next generation planes. These advanced electronic systems also require new higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for Amphenol.
In order to fuel further growth, Amphenol aims to acquire on a global basis in the high-growth segments that have complementary capabilities from a product, customer and/or geographic standpoint. During fourth-quarter 2015, Amphenol completed the acquisition of FCI Asia Pte Ltd for $1.275 billion. This takeover is expected to be accretive to Amphenol’s earnings from the first year of its integration and provide synergistic benefits with advanced technological support and an experienced management team. We remain impressed by the company’s activity on the acquisition front and expect it to be accretive in the long term with improvement in operating income margin and strong operating discipline.
Furthermore, 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 automotive industrial and 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 further enable the company to post strong results. A sustained drive for geographic and market diversification has enabled Amphenol to extend its presence into new customers and new applications.
Amphenol presently has a Zacks Rank #3 (Hold). Some better-ranked stocks that are worth considering in the industry include CoStar Group Inc. CSGP, EarthLink Holdings Corp. ELNK and GTT Communications, Inc. GTT, each carrying a Zack Rank #2 (Buy).
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