Citing their historical performance in varying levels of economic weakness and strength, Ticonderoga said Amphenol (NYSE:APH) is prepared to perform strongly whichever way the economy goes at this time as well.
Ticonderoga says, "Last night (Wednesday), Amphenol announced that the Board of Directors authorized a new 20 million share stock repurchase program that equates to approximately $1.1 billion with the stock at current levels or over 11% of the shares outstanding in 4Q10...If you are a bull on the economy, we expect Amphenol to benefit from improved tech demand trends without the execution risk of its peers. If you were less optimistic on this recovery, Amphenol has proven its ability to outperform during downturns, and the 2008-2009 performance was the most recent example. Over the past eleven years (through booms and busts), Amphenol has managed to grow revenue by nearly 10% annually with 18% pro forma EPS growth. Over the past five years, sales have risen by 14.5% annually and pro forma EPS has grown by 19% per year. Since 1999, operating margins have expanded from 15.9% to 19.7% in 2010. We believe few companies in the tech supply chain or the tech world can boast such consistent growth performance over this time period, which is one of the reasons we believe Amphenol deserves to trade at a healthy premium to its peers and other tech stocks."
Ticonderoga reiterates a "Buy" rating on Amphenol (APH), which closed Thursday at $56.77, up $1.44. or 2.60 percent. Ticonderoga has a price target on Amphenol of $64.
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