Amphenol Corporation: Recruiting Talent and Steady Returns

The people making the parts in all the telecommunications and mobile equipment sold world-wide often go unnoticed as their stocks go from the lower left to the upper right without investors ever casting doubt. Amphenol Corporation (NYSE:APH) manufactures interconnects and other various electronic components. The thing is, the only people that ever notice companies like this are engineers. Since the average retail investor doesn’t necessarily understand what they sell, this leaves out a small pool of buyers and leaves current investors standing around the water cooler talking about stocks like Research in Motion (RIMM), while nobody ever mentions how the Blackberry maker is the exact kind of company that is likely to be buying Amphenol’s products.

I know from close acquaintances that Amphenol, at least in the Toronto office, is demonstrating excellent choices in employee recruitment decisions. They truly know talent when they see it. That’s a good sign about the current management and the future of the company, as well as likely the current team hard at work. How a company is doing building a talented team is the number one thing I look for when considering an investment in a growing company. Of course, I actually have a long list of number one things and an even longer list of number two things. However, Amphenol is doing fairly well in terms of my steep requirements. Upon first inspection, ROE looks to be the healthiest in the industry; Analysts & Fools like the stock; it’s just barely volatile enough to generate some cash selling calls,; and growth looks steady combined with financial ratios looking fair. Upon further inspection, Amphenol looks like a solid investment in the long run, and at the current levels, an opportunity.

Disclosure: I don’t own any yet, but likely will in the near future.