AMPHENOL APH

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AMPHENOL (APH)

• Analyst Mallory Skipp
• October 16, 2008

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WHAT THEY DO

• Amphenol is the third largest manufacturers of
  interconnect products in the world. The company
  designs, manufactures and markets electrical,
  electronic and fiber optic connectors, coaxial
  and flat-ribbon cable, and interconnect systems.
• Products consist of cable and pipe supports,
  electric cable, filter connectors, mobile and
  portable connectors, smart card connectors, and
  many more.

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RECENT NEWS

• Oct.16 Third quarter profits rose 23, helped
  by stronger sales in communications military and
  aerospace markets
• Oct 16. Sales have increased 18 from last year
  
• Oct.16 Decreased fourth quarter results, but
  increased end of the year profit and revenue
  outlooks
• Oct. 13 - Stock price rose 10.36 from 28.57 to
  31.52

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GENERAL INFORMATION

• Ticker APH
• Current Price 25.65
• 52-week range 26.50 - 52.28
• Industry Information Technology
• Market Cap 5.65 Billion
• Portfolio Weight 5.43

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QUANTITATIVE ANALYSIS
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VALUATION RATIOS
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TIME-SERIES ANALYSIS
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CROSS SECTIONAL ANALYSIS
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STRENGTHS

• One of the largest manufacturer of electric and
  fiber optic connectors, cable, cable assembly and
  interconnects in the world
• Global Presence Americas, Europe, Africa and
  Asia
• Strong RD capabilities recently has focused on
  creation of new products and improved products
• Strong growth in revenues and profits revenue
  has increased 23 in the past 5 years (2003-2007)
  
• Operating profit has grown in the past 5 years
  28 and similarly net profit has grown 36

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WEAKNESSES

• Dependence on communications industry approx.
  60 of revenue come from wireless communication
  and broadband communication
• Demand for these products and services depend
  primarily on capital spending by cable television
  operators for constructing, rebuilding or
  upgrading their systems
• This dependence increases the business risk of
  the company

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OPPORTUNITIES

• Launch of new products in 2007, Amphenol
  corporation launched a series of new products,
  these products could help boost revenues
• Growing demand for broadband services demand for
  broadband and high-speed services are expanding,
  these new customers will provide new product
  opportunities for Amphenol
• Growing cable market in US expected to grow over
  the next 5 years
• - Companys strong presence in the cable market
  provides a significant opportunity for the
  company to boost its top line growth

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THREATS

• Reduction in the US defense expenditure
  Approximately 15 of the company's 2007 revenues
  came from sales to the military market, most of
  these are related to both US and foreign
  militaries
• Intense competition operates in a highly
  competitive market, this competition increases
  pricing pressures, which adversely effects its
  margins
• Environmental regulations operations are subject
  to numerous international, federal, state and
  local laws and regulations

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1 YEAR CHART VS. SP 500
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MOVING AVERAGE AND RSI GRAPH PAST 5 YEARS
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INTRINSIC VALUE

• Intrinsic Vale- 37.60
• (based on TD AmerTrade.com, Standard Poors
  computation)
• Undervalued by 4.39 (13.2)

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RECOMMENDATION

• HOLD ALL 100 SHARES
• REASONS
• LEADING MANUFACTURER IN THE INDUSTRY
• HIGH RETURN ON STOCK
• RSI LINE SHOWS AT ABOUT 20 (BUY)
• STILL CONTINUES TO OUTPERFORM THE SP 500
• FEBRUARY 2009 ANALOG TELEVISION SWITCHES TO
  DIGITAL, POTENTIAL FOR CABLE MARKET TO EXPAND