1. Amphenol Corporation (NYSE:APH)
Market Cap as of October 22: $80.69 billion
Number of Hedge Fund Holders: 72
Amphenol Corporation (NYSE:APH) is a leader in broadband communication products for cable, satellite, and telecommunications networks, as well as a provider of high-performance interconnect systems and components for the aerospace market. It offers a wide range of products, including connectors, cables, and cable assemblies, used in industries such as automotive, aerospace, industrial applications, and communications. These products are essential for connecting and protecting electrical signals, power, and data, enabling critical applications to operate safely and reliably.
The second quarter of 2024 saw strong revenue growth of 26.24% compared to the previous year, generating a record amount of $4.04 billion. Sequentially, sales grew 12% and orders reached a record $4.412 billion, increasing 39% year-over-year and 9% sequentially. Sales in the Harsh Environment Solutions segment increased by 35%. Communications Solutions sales grew 32%, while Interconnect and Sensor Systems sales increased 12%.
It completed the acquisitions of Lutze Europe and CIT, and the acquisition of the Andrew businesses from CommScope is expected to close in the first quarter of 2025. Its end market exposure remains highly diversified, providing resilience in various economic conditions. The company experienced strong growth in defense, commercial air, mobile devices, and IT datacom markets, while the industrial and automotive markets faced some challenges with slower demand in certain regions.
The company’s strong financial performance is evident in its healthy balance sheet and robust liquidity position. Its effective management of inventory accounts receivable, and accounts payable has contributed to its overall financial health. Amphenol Corporation’s (NYSE:APH) commitment to returning capital to shareholders through share repurchases and dividends demonstrates its dedication to creating value for investors.
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding Amphenol Corporation (NYSE:APH) in its Q2 2024 investor letter:
“Adding to that trend, Amphenol Corporation (NYSE:APH) reported better-than-expected results. The producer of electrical, electronic and fiber optic cables, and connectors showed steady organic revenue growth and enhanced its margins—especially in areas such as data communications, military applications, and commercial aerospace. Guidance for the next fiscal quarter was higher than expected, and Amphenol’s shares responded with a 17% gain.”
While we acknowledge the growth potential of Amphenol Corporation (NYSE:APH), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than APH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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