Amphenol Hits 52-Week High on Stock-Split News & Record Q2


Shares of diversified electronics manufacturer Amphenol Corporation (APH) scaled a new 52-week high of $100.26 on Aug 13, before closing the trading session a notch lower at $100.03 for a healthy one-year return of 30.3%.

Amphenol’s share price has consistently been on an uptrend since Feb 2014. This Zacks Rank #2 (Buy) stock is currently trading at a forward P/E of 22.7x and has long-term earnings growth expectation of 10.5%.

Growth Drivers

Amphenol recently disclosed its plans to bring about a two-for-one stock split in October this year. The split stock will be paid in the form of stock dividend and each shareholder at the close of business hours on Oct 2, 2014 will receive an additional share on the record date.

The strategic move is expected to increase the liquidity of the stock and lead to more trading as the number of outstanding shares is doubled and share price halved. This in turn might further drive up share prices as more small investors buy the stock and boost demand.

The tactical decision follows stellar second-quarter 2014 results, wherein Amphenol reported record earnings and revenues. Amphenol’s balanced organic and inorganic growth models coupled with its technology leadership and market and geographic diversification enabled it to comfortably beat the Zacks Consensus Estimate. The company also benefited from a lean and flexible cost structure and an agile and entrepreneurial management team.  

The solid fundamentals also find confirmation in positive earnings estimate revisions, driving the Zacks Consensus Estimate higher both for the ongoing quarter as well as for the year. The Zacks Consensus Estimates for the ongoing quarter and year are currently pegged at $1.14 and $4.40, respectively, representing 16.0% and 14.2% year-over-year growth.

Moving forward, Amphenol is also bullish about its revenue and earnings expectations in the forthcoming quarters despite the uncertainties prevailing in the global economy. The ongoing revolution in electronics further enables the company to capitalize on these opportunities and strengthen its position in the market. We also remain buoyant on the stock.

Other Stocks to Consider

Other stocks that look promising and are worth a look in the industry include InvenSense, Inc. (INVN), Nidec Corporation (NJ) and Universal Display Corp. (OLED). All these stocks carry a comparable Zacks Rank #2 (Buy).

Read the Full Research Report on APH
Read the Full Research Report on INVN
Read the Full Research Report on NJ
Read the Full Research Report on OLED

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