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Amphenol (APH) Hits 52-Week High on Solid Growth Prospects

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Shares of diversified electronics manufacturer Amphenol CorporationAPH scaled a new 52-week high of $69.46 on Feb 17 for a healthy one-year return of 33.3%. Barring minor hiccups, Amphenol's share price has steadily been on an uptrend since July last year. The company has a modest long-term earnings growth expectation of 6.4%.

Growth Drivers

Amphenol reported strong fourth-quarter 2016 results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the reported quarter were 75 cents per share compared with 63 cents in the year-earlier quarter. The upside was primarily driven by higher revenues. GAAP earnings for the reported quarter exceeded the Zacks Consensus Estimate by 3 cents.

The company recorded all-time high revenues of $1,651.1 million in the fourth quarter compared with $1,430.5 million in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1,609 million. The improved revenue performance was mostly driven by organic growth across all markets, except mobile devices and commercial aerospace, along with healthy inorganic growth.

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 robust results. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.

Amphenol Corporation Price and Consensus

Amphenol Corporation Price and Consensus | Amphenol Corporation Quote

Despite the uncertainties prevailing in the global economy, Amphenol also 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 $6.340 billion to $6.500 billion, representing a year-over-year increase of 1-3%. The company expects GAAP earnings per share in the range of $2.84 to $2.92, an increase of 9-12% year over year.

Such a bullish outlook with continued growth impetus and core focus perhaps boosted investors' confidence and catapulted share prices of this Zacks Rank #4 (Sell) stock to a new 52-week high.

Stocks to Consider

Some better-ranked stocks in the same space include Applied Industrial Technologies, Inc. AIT , Colfax Corporation CFX and EnPro Industries, Inc. NPO , each carrying a Zacks Rank #2 (Buy). 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 24.1x.

Colfax has a positive earnings surprise history with an average of 8.06% in the trailing four quarters, comprehensively beating estimates in each quarter.

EnPro has long-term earnings growth expectations of 6.8% and is currently trading at a forward P/E of 25.57x.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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