New 52-Week High for Amphenol - Analyst Blog

Shares of diversified electronics manufacturer Amphenol Corporation APH hit a new 52-week high of $96.60 on May 1, before closing the trading session a notch lower at $96.33 for a healthy year-over-year return of 27.1%.

Amphenol's share price has been on an uptrend from Feb 2014. Despite its strong price appreciation, this Zacks Rank #2 (Buy) stock still has enough fundamentals that may further drive the stock upward. Currently, the stock is trading at a forward P/E of 22.1x and has long-term earnings growth expectation of 8.8%.

Growth Drivers

Impressive first-quarter 2014 results that comprised higher sales across its businesses, healthy bottom-line growth and new product rollouts were the primary driving factors for the stock.

On Apr 23, Amphenol reported net income of $158.5 million or 98 cents per share compared with $153.0 million or 94 cents per share in the year-ago quarter. Quarterly revenues improved 15% year over year to $1,246 million. The company's top-line benefited from strength across diversified markets, including automotive, commercial air, industrial, mobile networks and IT and datacom markets.

Amphenol's balanced organic and inorganic growth models coupled with its technology leadership and market and geographic diversification enabled it to comfortably beat both the earnings and revenue Zacks Consensus Estimate. The company also benefited from a lean and flexible cost structure and an agile and entrepreneurial management team.

Amphenol is bullish about the proliferation of new electronic products in most of its end markets that is likely to drive demand. The company also continues to harness technology and expand the product suite of its Information Technology and Data Communication segment. 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.

Other Stocks to Consider

Other stocks worth considering in the industry include Ballard Power Systems Inc. BLDP, CTS Corporation CTS and Kyocera Corp. KYO. All these stocks carry a comparable Zacks Rank #2 (Buy).