Amphenol Corp. Class A (NYSE:APH) Ticks Key Boxes for Growth Investors in Navellier Screen

Amphenol Corp. Class A (NYSE:APH) has appeared as a notable candidate for growth investors using the screening method from Louis Navellier’s The Little Book That Makes You Rich. The strategy focuses on finding companies with improving fundamentals, such as earnings revisions, sales growth, margin improvement, and good returns on equity, that suggest a chance for lasting outperformance. This method favors stocks that show both past strength and progress in important financial measures, setting them up for further growth.

The screen uses eight specific rules from Navellier’s work, and Amphenol satisfies or surpasses many of these points:

• Positive Earnings Revisions: Analysts have increased EPS estimates for the next quarter by 32.59% over the past three months, showing higher confidence in near-term results. This measure is important because higher revisions frequently mirror better business conditions or operational successes that may not be completely reflected in the stock price.
• Positive Earnings Surprises: The company has recorded an average earnings surprise of 15.08% over the last four quarters, exceeding expectations regularly. A history of surprises can cause analysts to raise future estimates, generating a constructive cycle for the stock.
• Increasing Sales Growth: Amphenol reported year-over-year revenue growth of 40.51% and quarterly sales growth of 56.53%, reflecting solid demand and performance. Rising sales are a key trait of successful growth companies, as they show market share increases or entry into new areas.
• Expanding Operating Margins: Operating margins increased by 9.02% over the past year, showing the company’s capacity to grow profitability along with revenue. Margin improvement is particularly important in growth investing, as it frequently indicates operational effectiveness and pricing strength.
• Strong Cash Flow: Free cash flow rose 45.04% year-over-year, giving the company options to fund growth, seek acquisitions, or give capital back to shareholders. Good cash generation is a signal of financial health and less need for outside funding.
• Earnings Growth: EPS grew 51.83% over the past year on a trailing basis, with quarterly growth reaching 84.09%. High earnings growth is a core part of the strategy, as it builds investor confidence and valuation increases.
• Positive Earnings Momentum: The rise in quarterly EPS growth, from 22.22% in the year-ago period to 84.09% most recently, indicates improving operational momentum. Navellier notes that earnings acceleration frequently comes before major price gains.
• High Return on Equity: Amphenol’s ROE of 27.60% is much higher than the minimum level of 10%, showing good use of shareholder capital. A high and increasing ROE can be a sign of a well-run company with a lasting competitive edge.

Beyond these screening points, Amphenol’s wider fundamental profile, as detailed in its fundamental analysis report, supports the investment case. The company has a good profitability rating, with top-tier margins and returns on capital, although its valuation multiples are high compared to the market. Growth measures are especially good, with past and expected increases in both earnings and revenue. While the company has a reasonable amount of debt, its balance sheet is acceptable, and its cash flow strength offers protection against possible challenges.

For investors wanting to review other companies that match this strict growth screen, more results are available here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consider their financial situation and risk tolerance before making investment decisions.