Growth stocks are catnip to investors. They jingle and sparkle, effortlessly grabbing the gaze and at times, yielding stellar returns. But like a capricious feline, they carry risk and volatility. A company’s growth narrative burning out could singe investors with significant losses. Scouting for radiant growth stocks is as daunting as finding a needle in the proverbial haystack
Luckily, the Zacks Growth Style Score – one of the cogs in the Zacks Style Scores system – is a beacon in this tangled thicket. This metric, disregarding traditional growth metrics, keenly scrutinizes a company’s genuine growth outlook. Enter Amphenol (APH) – a stock our proprietary system currently touts. This behemoth not only brags a savory Growth Score but also sports a premier Zacks Rank. Scholars have exhaustively demonstrated that stocks bedecked with top-notch growth features consistently outperform the market. The untold grandeur is that stocks boasting a tango of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy) churn out even plumper returns.
Surging Earnings Growth
Arguably, nothing whets investors’ palates like surging earnings growth. After all, soaring profit levels are the lodestar for most stock gazers. For growth hounds, double-digit earnings growth is de rigueur and often signals robust prospects and plum stock price gains for the company under scrutiny.
Amidst historical EPS growth of 14.4% for Amphenol, the real candy lies in projected earnings. The company is slated for an 8.4% EPS surge this year, gleefully outpacing the industry’s grim average, which paints a bleak picture of a -39.3% EPS growth.
Sustained Cash Flow Growth
Cash, akin to the essence of life, courses through a business’s veins. However, above-average cash flow growth sings a sweeter ditty for growth-hungry firms than it does for seasoned companies. Why, you ask? Because a bounteous cash reservoir empowers these firms to adroitly lap up novel projects sans raising dear external funds.
At present, Amphenol boasts a year-over-year cash flow growth of 0.9%, trouncing many of its peers. In fact, this figure dances around the industry’s average of -18.7%. Delving into historical annals unfolds an enchanting tale – the company’s annualized cash flow growth galloped at 9% over the bygone 3-5 years, eclipsing the industry’s 3.5% average.
Promising Earnings Estimate Revisions
Delving beyond the numbers we’ve marched through, astute investors should train their gaze on the trajectory of earnings estimate revisions. Here, a merry uptick warms the cockles. Why, you inquire? Empirical fables whisper of a potent link betwixt trends in earnings estimate revisions and proximate stock price capers.
A song of ecstasy awaits in the upward revisions of current-year earnings estimates for Amphenol. The Zacks Consensus Estimate for the current year leapt 1.3% in the past moon.
The Parting Shot
Emboldened by its ascent into a Zacks Rank #2 stock on the wings of overall earnings estimate revisions, Amphenol has further adorned itself with a Growth Score of B. This melange of findings indicates that Amphenol is poised to prance into the limelight, primed as an ethereal crescendo for growth devotees.
Feast your eyes on the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
What of the newest knight in the semiconductor realm, you ask? Smaller than an ant next to the behemoth NVIDIA that has soared a gripping +800% since receiving the baton, this chip stock, my friend, has leagues more prime estate to conquer. Endowed with robust earnings growth and an expanding clientele, it stands ready to sate the rapacious demand for Artificial Intelligence, Machine Learning, and Internet of Things. The global semiconductor theater is prophesied to balloon from $452 billion in 2021 to $803 billion by the sacred year of 2028.
Behold This Stock Now for Free >>
Craving the freshest scoop from Zacks Investment Research? Today, you can haul in 7 Best Stocks for the Next 30 Days. Give this free report a twirl!
Amphenol Corporation (APH) : Free Stock Analysis Report
To pore over this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
