AMPHENOL CORP-CL A (NYSE:APH) Combines High Growth Momentum with Strong Technical Setup

For investors looking to join solid fundamental growth with positive technical patterns, a multi-layered screening method can be especially effective. One method finds companies that show high earnings and sales momentum, a trait valued by growth-focused strategies like CANSLIM, while also showing firm price trends and positive chart patterns. This method selects securities with a high ChartMill High Growth Momentum (HGM) Rating, a firm Technical (TA) Rating, and a high Setup Quality Rating. The aim is to locate stocks where strong fundamental speed matches a technically healthy price structure, possibly indicating an ongoing upward move.

AMPHENOL CORP-CL A (NYSE:APH) appears from such a screen, presenting a strong case for this joined strategy. The company, a top designer and maker of electrical, electronic, and fiber optic connectors, works in industrial, automotive, aerospace, and communications markets. Its recent results indicate it is performing well in several areas.

High Growth Momentum Fundamentals

The center of the high growth momentum view for Amphenol depends on its excellent recent financial results. The company's HGM Rating of 8 shows notable firmness across several important measures that the rating checks, including earnings growth, speed, and positive analyst changes.

• Strong Earnings Growth: The company's earnings per share (EPS) growth is a notable feature. On a trailing twelve-month (TTM) basis, EPS has increased by about 67%. More notably, the latest quarter saw EPS rise 86% against the same quarter last year, after growth rates of 84% and 58% in the two earlier quarters. This shows not only growth, but strong repeated momentum.
• Firm and Speeding Sales: Revenue growth gives a solid base for this earnings rise. TTM sales growth is over 47%. The latest quarter's sales increased by 53% year-over-year, showing speed from the 30% growth reported three quarters ago. This speed in the top line is a key part of the HGM Rating, showing rising business momentum.
• Steady Performance and Higher Estimates: Amphenol has a perfect history of beating analyst estimates for both EPS and revenue over the last four quarters, with average beats of 16.5% and 10.0%, in that order. Also, analysts have been lifting their forecasts, with the average EPS estimate for the next year moved higher by over 8% in the last three months. This mix of steady better-than-expected results and rising expectations is a sign of high-growth momentum stocks.

Technical Firmness and Setup Quality

While firm fundamentals are necessary, the technical view decides the timing and risk outline of a possible investment. According to the detailed ChartMill Technical Report, Amphenol shows a firm technical profile with a TA Rating of 8 and a Setup Rating of 7.

• Set Uptrend: The report states that the long-term trend for APH is positive, with the stock doing better than 93% of the wider market over the past year. It trades well above key moving averages (50-day, 100-day, and 200-day), which are all in rising patterns, confirming the firmness of the basic trend.
• Market and Industry Position: The stock's relative firmness is a key technical positive, as it does better than 85% of its peers in the Electronic Equipment, Instruments & Components industry. This position is a key filter for momentum strategies, which aim to invest in the firmest stocks within a firm market.
• Consolidation and Setup Possibility: The Setup Rating of 7 shows the stock is forming a positive pattern. The technical report describes the stock as trading within a set range over the past month. While recent movement has been somewhat higher for a perfect, close consolidation, the presence of clear support and resistance zones allows for a set risk check. The report finds a main support zone between $126.50 and $129.23, giving a logical area for a stop-loss order.

Combination: Growth Meets Technical Structure

The screening method is made to find the meeting of two strong forces: fundamental momentum and technical readiness. Amphenol fits this outline. Its strong quarterly earnings growth, speeding sales, and positive estimate changes meet the strict needs of a high-growth momentum strategy. At the same time, its firm relative strength, set uptrend, and current consolidation phase give the technical "setup" that traders look for to handle entry and risk.

It is important to state that the technical report proposes waiting for a more set consolidation for a better entry point, as recent price action has been volatile. However, the mix of high ratings across both fundamental momentum and technical health makes APH a stock worth close watching by growth-focused investors.

For investors curious in finding other companies that meet these strict standards of high growth momentum paired with firm technical setups, more study can be done using the High Growth Momentum Breakout Setups Screen.

Disclaimer: This article is for information only and does not form investment advice, a suggestion, or an offer to buy or sell any security. The study is based on data given and shows conditions at a specific time. Investors should do their own full study and think about their personal financial position and risk tolerance before making any investment choices. Past results are not a guide for future results.