Amphenol Corp. - Class A (NYSE:APH) Fits Louis Navellier’s Growth Investing Strategy with Strong Earnings and Revenue Momentum

Louis Navellier’s The Little Book That Makes You Rich presents a growth investing method centered on finding stocks with solid earnings momentum, rising revenue, and better profitability. The strategy uses eight main rules to identify companies with strong growth traits. These factors include upward earnings revisions, regular earnings beats, growing sales and margins, healthy cash flow, and strong returns on equity. By applying these filters, investors seek stocks likely to perform well over time.

Amphenol Corp. - Class A (NYSE:APH) stands out as a potential match for Navellier’s approach. The firm, a top producer of electronic and fiber optic connectors, displays many of the traits highlighted by the strategy. Here’s a breakdown of how APH meets the eight rules:

1. Positive Earnings Revisions

Analysts have increased EPS forecasts for APH’s next quarter by 19.79% in the last three months. This upward adjustment reflects rising confidence in the company’s short-term results, a key factor in Navellier’s system, as it points to underlying business health.

2. Positive Earnings Surprises

APH has exceeded earnings estimates in each of the past four quarters, with an average beat of 15.08%. Regular earnings surprises show the company’s ability to perform and often lead to further estimate increases, boosting the stock.

3. Increasing Sales Growth

Revenue growth is a core part of Navellier’s method, and APH delivers with:

• 56.53% quarter-over-quarter sales growth
• 40.51% year-over-year revenue increase

Rising sales signal strong demand and market share gains, essential for long-term growth.

4. Expanding Operating Margins

APH’s operating margin has grown by 9.02% over the past year, reaching 23.01%. Wider margins suggest better cost control and pricing strength, both of which improve profitability as revenue grows.

5. Strong Cash Flow

Free cash flow growth of 45.04% year-over-year highlights APH’s ability to produce liquidity. Solid cash flow supports reinvestment, debt reduction, and shareholder returns, qualities Navellier looks for in lasting growth.

6. Earnings Growth

The company’s EPS jumped 84.09% quarter-over-quarter and 51.83% year-over-year. Such strong earnings growth fits Navellier’s focus on firms with improving bottom-line results.

7. Positive Earnings Momentum

APH’s current quarterly EPS growth (84.09%) far exceeds the same quarter’s growth a year ago (22.22%). This speedup in profitability is a key part of Navellier’s strategy, showing better business conditions.

8. High Return on Equity (ROE)

With an ROE of 27.60%, APH ranks among the best in its industry. High ROE reflects smart capital use, a trait Navellier prizes as it shows management’s skill in creating value for shareholders.

Fundamental Analysis Summary

ChartMill’s fundamental report gives APH a score of 7/10, noting its strong profitability, growth path, and fair valuation compared to peers. Key strengths include top-tier operating margins, healthy cash flow, and steady earnings growth. While the stock trades at a higher P/E ratio, its growth potential and high ROE may support the price.

Exploring Further

For investors looking to find more stocks that fit Louis Navellier’s criteria, the pre-configured screener provides other options.

Disclaimer: This article is not investment advice. Conduct your own research or consult a financial advisor before making investment decisions.