Amphenol Corporation: Stock Price Defines a ‘Pennant’
Guest blogger: Larry Schutts, vice president of Stockwinners.com and a contributing editor for Theflyonthewall.com. Larry looks for stocks with technical and fundamental characteristics indicating gains in the next 30 days. However, price movements may be volatile. He includes a stop-loss price in each post. Consider selling a position should the stop-loss be violated.
High technology components are only as good as the connectors and
cables linking them all together. A leader in the art of fashioning
these vital hyperlinks is headquartered in Wallingford, Connecticut.
Amphenol Corporation (NYSE:APH)
makes electrical connectors and cables for communications, medical,
aerospace, military and industrial systems. The firm’s connectors are
used in computers, aircraft, cars, office equipment and medical
instruments. Its coaxial cable goes to cable TV clients and its
flat-ribbon cables are used with computer and telecommunications
products. Amphenol ships to more than 10,000 customer locations around
the world.
Investors were pleased earlier in the week, when the firm reported Q3 EPS of 50 cents and revenues of $733.9 million. The![]()
Street had been looking for 46 cents and $692.4 million. The CEO famous
specific strength in the military, commercial aerospace, automotive
and mobile device markets. Management plus guided Q4 EPS to 50-52
(49 cent consensus) and Q4 revenues to $740 million-$755 million
($712.88 million consensus). Deutsche Securities, Lehman Brothers and
RBC Capital Markets subsequently reiterated “buy” ratings on the issue.
The stock popped on the news and next passed into the initial stage of
a bullish “pennant” consolidation sample. Prices frequently exit
pennants moving in the same direction they were traveling when they
entered them. In that case, that would be to the upside.
Altogether,
brokers recommend the shares with five “strong buys,” five “buys” and
two “holds.” Analysts expect a 20% average annual growth rate through
the next five years. The APH PEG ratio (1.22), Sales Growth rate
(15.31%), EPS Growth rate (31.58%), Operating Margin (19.17%), Return
on Assets (14.38%), Return on Investment (17.77%) and Return on fairness
(33.18%) compare favorably with industry, sector and S&P 500
averages. Institutions own about 94% of the outstanding shares. The
stock is one of those used to calculate the S&P 400 MidCap Index.
by the past 52 weeks, it has traded amidst $30.61 and $45.76. A
stop-loss of $37.60 looks good here.
Original post by Jed Pittman
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