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Amphenol Case Summary

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As capital markets analysts, it is our sole duty to ensure the happiness of our clients and investors through rigorous financial models of a particular company’s stock for the purpose of forecasting its future trends, and ultimately leading to a recommendation of whether that particular stock should be bought or sold. In the general sense, a successful long-term investment strategy involves the following characteristics: selecting a comprehensible investment, investing early and taking appropriate risks, establishing a cash-flow plan, making stocks the central focus while also taking into account diversification, and achieving an effective balance by investing in bond funds for a safety net. It is also imperative to use tax advantaged investment …show more content…

When looking at its revenue growth, Amphenol outpaces the industry average of 1.0%. Reflecting back on the same quarter one year prior, revenues have accelerated 7.4%. Accelerating earnings growth is indicative of a promising stock. The earnings per share for the company has improved by 14.0% in the most recent quarter versus the same quarter a year ago. Although the preferable earnings per share rate is about 18-20%, it is worth noting that the company has shown an upward trend in earnings per share growth in the past two years, according to a report published by The Street Ratings. This is indicative of the company’s potential to continue this trend. Additionally, a continued increase in earnings growth could help maintain this upward trend in earnings per share. The net income growth, which has greatly exceeded that of the S&P 500, increased by 12.2% when compared to the same quarter a year ago, jumping from $182.21 million to $204.50 million. The company’s return on equity is perhaps the most enticing testament to its strength in the organization. Its return on equity, which is 24.07%, appreciably exceeds that of other companies in the Electronic Equipments, Instrument & Components industry and the overall market, outranking both the industry average and the S&P 500. This doesn’t go to mention the company’s stock price performance, which has risen over the past year and is expected to continue rising with respect to the market conditions. What could make this investment somewhat risky, however, is its lower earnings and sales growth compared to its peers. Given its current performance relative to other companies of its class, it is safe to say that this stock is a good buying option and will do well in the near

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