Amphenol Corporation (APH): Is It One of the Most Profitable Stocks of the Last 20 Years?

Laiba Immad

Sat, 20 Jul 2024, 7:52 am5-min read

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We recently compiled a list of the 20 Most Profitable Stocks of the Last 20 Years. In this article, we are going to take a look at where Amphenol Corporation (NYSE:APH) stands against the other profitable stocks.

The stock market has a long history of generating wealth for investors. While past performance doesn't guarantee future results, studying successful companies can provide valuable insights. By understanding the factors that drive these companies' growth, we can potentially make better investment decisions in the future. It's important to remember that investing involves risk, and conducting thorough research is crucial before making any investment decisions.

Investors frequently overlook revenue in favor of profitability when evaluating stocks. Profit is what's left over after all costs are paid. Revenue is the total amount of goods and services sold. Because it is essential to determine if a business is a growth stock or a value one, profitability is important. To learn more about growth stocks, see 12 Best Growth Stocks to Buy and Hold in 2024. You can also discover some undervalued value stocks by reading 11 Oversold Value Stocks To Buy Now.

The U.S. stock market has seen several major events since 2000, including the dot-com boom and fall, the 2008 financial crisis, a tech boom with trillion-dollar values, and the 2020 pandemic crisis. The S&P's broader market index produced double-digit yearly returns thirteen times between 2003 and 2023. This strong performance can be largely attributed to the phenomenal returns generated by technology stocks, which significantly boosted the overall return of the large-cap market.

According to a recent estimate, the aggregate market value of the top seven S&P 500 corporations is almost double that of the Japanese market. The head of topical research and global economics, Jim Reid, cautions that this is the most concentrated the US market has ever been.

As interest in growth stocks increases due to the hype surrounding AI and the prospect of rate cuts, these companies' fortunes are expected to soar. To satisfy market demand, businesses are making significant investments in AI. AI's impact on altering work patterns was highlighted by Satya Nadella du. According to them,:

“A growing body of evidence makes clear the role AI will play in transforming work. Our own research, as well as external studies, show as much as 70% improvement in productivity, using generative AI for specific work tasks."

Our Methodology

To identify the most profitable stocks, we looked at the 20-year annualized returns of publicly traded companies in the US market from 2004 to 2024 and selected and ranked those with the highest 20-year annualized returns.

A team of technicians assembling a complex electrical connector in a factory environment.

Amphenol Corporation (NYSE:APH)

20-Year Annualized Return: 19.98%

Amphenol Corporation (NYSE:APH) is a leading global manufacturer of interconnect products, sensors, and antennas for a diverse array of end markets, including automotive, broadband, commercial aerospace, industrial, information technology, and military. APH's stock price more than tripled over the last 5 years.

Amphenol Corporation (NYSE:APH) demonstrated strong profitability and impressive revenue growth in Q1 2024. The company's adjusted diluted EPS increased by 16% to $0.80 compared to Q1 2023.. Revenue for the quarter reached $3.256 billion, marking a 6% organic growth year-over-year. This growth was driven by strong performances across Amphenol's segments: Harsh Environment Solutions saw sales of $916 million, up 7% in U.S. dollars and 3% organically; Communications Solutions achieved sales of $1.266 billion, up 12% in U.S. dollars and 11% organically; and Interconnect and Sensor Systems reported sales of $1.075 billion, up 8% in U.S. dollars and 2% organically. Amphenol is in the process of acquiring Carlisle Interconnect Technologies, expected to close by the end of Q2 2024. This acquisition is anticipated to add approximately $0.02 to earnings in the second half of 2024, excluding acquisition-related costs.

In Q1 2024, there were around 51 hedge fund holders in the company, up from 51 in the previous quarter with Select Equity Group being the largest holder in the company with around 5,186,514 shares worth $299,132,195.

The average analyst rating for Amphenol stock is "Strong Buy", with 12 analysts providing 12-month price forecasts. The average target price is $68.17, ranging from a low estimate of $57.5 to a high estimate of $80. This forecast suggests a modest increase of 0.56% from the current stock price of $67.79.

Overall APH ranks 15th on our list of the most profitable stocks of the last 20 years. You can visit 20 Most Profitable Stocks of the Last 20 Years to see the other profitable stocks that are on hedge funds’ radar. While we acknowledge the potential of APH as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than APH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.