Intrinsic value of Amphenol Cl A - APH

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$72.31

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$72.31

 
Intrinsic value

$104.37

 
Up/down potential

+44%

 
Rating

buy

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of APH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 22.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.87
  15.40
  14.36
  13.42
  12.58
  11.82
  11.14
  10.53
  9.97
  9.48
  9.03
  8.63
  8.26
  7.94
  7.64
  7.38
  7.14
  6.93
  6.73
  6.56
  6.40
  6.26
  6.14
  6.02
  5.92
  5.83
  5.75
  5.67
  5.60
  5.54
  5.49
Revenue, $m
  6,286
  7,254
  8,296
  9,409
  10,593
  11,846
  13,165
  14,551
  16,003
  17,519
  19,101
  20,749
  22,463
  24,246
  26,100
  28,026
  30,027
  32,107
  34,269
  36,518
  38,857
  41,291
  43,825
  46,465
  49,217
  52,086
  55,079
  58,203
  61,465
  64,873
  68,435
Variable operating expenses, $m
 
  5,761
  6,536
  7,363
  8,244
  9,175
  10,156
  11,186
  12,265
  13,393
  14,569
  15,426
  16,701
  18,027
  19,404
  20,836
  22,324
  23,871
  25,478
  27,150
  28,889
  30,699
  32,583
  34,546
  36,591
  38,724
  40,950
  43,272
  45,698
  48,231
  50,879
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  5,081
  5,761
  6,536
  7,363
  8,244
  9,175
  10,156
  11,186
  12,265
  13,393
  14,569
  15,426
  16,701
  18,027
  19,404
  20,836
  22,324
  23,871
  25,478
  27,150
  28,889
  30,699
  32,583
  34,546
  36,591
  38,724
  40,950
  43,272
  45,698
  48,231
  50,879
Operating income, $m
  1,205
  1,493
  1,760
  2,046
  2,350
  2,671
  3,009
  3,365
  3,737
  4,126
  4,532
  5,323
  5,762
  6,220
  6,695
  7,189
  7,703
  8,236
  8,791
  9,368
  9,968
  10,592
  11,242
  11,920
  12,625
  13,361
  14,129
  14,931
  15,767
  16,642
  17,555
EBITDA, $m
  1,422
  1,917
  2,192
  2,486
  2,799
  3,130
  3,478
  3,844
  4,228
  4,629
  5,046
  5,482
  5,935
  6,406
  6,896
  7,404
  7,933
  8,483
  9,054
  9,648
  10,266
  10,909
  11,579
  12,276
  13,003
  13,761
  14,552
  15,377
  16,239
  17,139
  18,080
Interest expense (income), $m
  69
  92
  116
  142
  170
  199
  230
  263
  297
  333
  370
  410
  450
  493
  537
  583
  630
  680
  732
  785
  841
  899
  959
  1,022
  1,087
  1,155
  1,226
  1,300
  1,378
  1,458
  1,543
Earnings before tax, $m
  1,141
  1,401
  1,644
  1,904
  2,180
  2,472
  2,780
  3,102
  3,440
  3,793
  4,162
  4,913
  5,312
  5,727
  6,158
  6,607
  7,072
  7,556
  8,059
  8,583
  9,127
  9,694
  10,283
  10,898
  11,538
  12,206
  12,903
  13,630
  14,390
  15,183
  16,012
Tax expense, $m
  308
  378
  444
  514
  589
  667
  750
  838
  929
  1,024
  1,124
  1,327
  1,434
  1,546
  1,663
  1,784
  1,910
  2,040
  2,176
  2,317
  2,464
  2,617
  2,777
  2,942
  3,115
  3,296
  3,484
  3,680
  3,885
  4,099
  4,323
Net income, $m
  823
  1,023
  1,200
  1,390
  1,591
  1,805
  2,029
  2,265
  2,511
  2,769
  3,038
  3,587
  3,878
  4,181
  4,496
  4,823
  5,163
  5,516
  5,883
  6,265
  6,663
  7,076
  7,507
  7,955
  8,423
  8,911
  9,419
  9,950
  10,505
  11,084
  11,689

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,173
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,499
  8,455
  9,669
  10,967
  12,346
  13,806
  15,344
  16,960
  18,651
  20,419
  22,262
  24,183
  26,181
  28,259
  30,419
  32,664
  34,997
  37,421
  39,941
  42,561
  45,287
  48,124
  51,078
  54,155
  57,362
  60,706
  64,195
  67,836
  71,638
  75,610
  79,761
Adjusted assets (=assets-cash), $m
  7,326
  8,455
  9,669
  10,967
  12,346
  13,806
  15,344
  16,960
  18,651
  20,419
  22,262
  24,183
  26,181
  28,259
  30,419
  32,664
  34,997
  37,421
  39,941
  42,561
  45,287
  48,124
  51,078
  54,155
  57,362
  60,706
  64,195
  67,836
  71,638
  75,610
  79,761
Revenue / Adjusted assets
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
  0.858
Average production assets, $m
  913
  1,052
  1,203
  1,364
  1,536
  1,718
  1,909
  2,110
  2,320
  2,540
  2,770
  3,009
  3,257
  3,516
  3,784
  4,064
  4,354
  4,656
  4,969
  5,295
  5,634
  5,987
  6,355
  6,737
  7,136
  7,552
  7,986
  8,439
  8,912
  9,407
  9,923
Working capital, $m
  1,956
  1,335
  1,526
  1,731
  1,949
  2,180
  2,422
  2,677
  2,944
  3,224
  3,515
  3,818
  4,133
  4,461
  4,802
  5,157
  5,525
  5,908
  6,306
  6,719
  7,150
  7,597
  8,064
  8,550
  9,056
  9,584
  10,135
  10,709
  11,310
  11,937
  12,592
Total debt, $m
  3,011
  3,319
  4,056
  4,844
  5,681
  6,567
  7,501
  8,481
  9,508
  10,581
  11,700
  12,866
  14,079
  15,340
  16,651
  18,014
  19,430
  20,901
  22,431
  24,022
  25,676
  27,399
  29,191
  31,059
  33,006
  35,036
  37,153
  39,363
  41,671
  44,082
  46,602
Total liabilities, $m
  4,824
  5,132
  5,869
  6,657
  7,494
  8,380
  9,314
  10,294
  11,321
  12,394
  13,513
  14,679
  15,892
  17,153
  18,464
  19,827
  21,243
  22,714
  24,244
  25,835
  27,489
  29,212
  31,004
  32,872
  34,819
  36,849
  38,966
  41,176
  43,484
  45,895
  48,415
Total equity, $m
  3,675
  3,323
  3,800
  4,310
  4,852
  5,426
  6,030
  6,665
  7,330
  8,025
  8,749
  9,504
  10,289
  11,106
  11,955
  12,837
  13,754
  14,706
  15,697
  16,727
  17,798
  18,913
  20,074
  21,283
  22,543
  23,858
  25,229
  26,659
  28,154
  29,715
  31,346
Total liabilities and equity, $m
  8,499
  8,455
  9,669
  10,967
  12,346
  13,806
  15,344
  16,959
  18,651
  20,419
  22,262
  24,183
  26,181
  28,259
  30,419
  32,664
  34,997
  37,420
  39,941
  42,562
  45,287
  48,125
  51,078
  54,155
  57,362
  60,707
  64,195
  67,835
  71,638
  75,610
  79,761
Debt-to-equity ratio
  0.819
  1.000
  1.070
  1.120
  1.170
  1.210
  1.240
  1.270
  1.300
  1.320
  1.340
  1.350
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.430
  1.440
  1.440
  1.450
  1.450
  1.460
  1.460
  1.470
  1.470
  1.480
  1.480
  1.480
  1.490
Adjusted equity ratio
  0.342
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  823
  1,023
  1,200
  1,390
  1,591
  1,805
  2,029
  2,265
  2,511
  2,769
  3,038
  3,587
  3,878
  4,181
  4,496
  4,823
  5,163
  5,516
  5,883
  6,265
  6,663
  7,076
  7,507
  7,955
  8,423
  8,911
  9,419
  9,950
  10,505
  11,084
  11,689
Depreciation, amort., depletion, $m
  217
  424
  432
  440
  449
  459
  469
  480
  491
  502
  514
  159
  172
  186
  200
  215
  230
  246
  263
  280
  298
  317
  336
  356
  378
  400
  423
  447
  472
  498
  525
Funds from operations, $m
  1,103
  1,446
  1,632
  1,830
  2,041
  2,263
  2,498
  2,744
  3,002
  3,272
  3,552
  3,746
  4,050
  4,367
  4,696
  5,038
  5,393
  5,762
  6,146
  6,546
  6,961
  7,393
  7,843
  8,312
  8,801
  9,310
  9,842
  10,397
  10,976
  11,581
  12,214
Change in working capital, $m
  25
  178
  192
  205
  218
  230
  243
  255
  267
  279
  291
  303
  315
  328
  341
  354
  368
  383
  398
  414
  430
  448
  466
  486
  506
  528
  551
  575
  600
  627
  655
Cash from operations, $m
  1,078
  1,355
  1,440
  1,625
  1,823
  2,033
  2,255
  2,489
  2,735
  2,992
  3,261
  3,443
  3,735
  4,039
  4,355
  4,683
  5,025
  5,380
  5,748
  6,132
  6,530
  6,945
  7,377
  7,826
  8,294
  8,782
  9,291
  9,822
  10,376
  10,954
  11,559
Maintenance CAPEX, $m
  0
  -48
  -56
  -64
  -72
  -81
  -91
  -101
  -112
  -123
  -134
  -147
  -159
  -172
  -186
  -200
  -215
  -230
  -246
  -263
  -280
  -298
  -317
  -336
  -356
  -378
  -400
  -423
  -447
  -472
  -498
New CAPEX, $m
  -191
  -139
  -151
  -161
  -172
  -182
  -191
  -201
  -210
  -220
  -229
  -239
  -249
  -259
  -269
  -279
  -290
  -302
  -314
  -326
  -339
  -353
  -367
  -383
  -399
  -416
  -434
  -453
  -473
  -494
  -516
Cash from investing activities, $m
  -1,613
  -187
  -207
  -225
  -244
  -263
  -282
  -302
  -322
  -343
  -363
  -386
  -408
  -431
  -455
  -479
  -505
  -532
  -560
  -589
  -619
  -651
  -684
  -719
  -755
  -794
  -834
  -876
  -920
  -966
  -1,014
Free cash flow, $m
  -535
  1,168
  1,233
  1,400
  1,579
  1,770
  1,973
  2,187
  2,413
  2,650
  2,898
  3,057
  3,327
  3,608
  3,900
  4,204
  4,520
  4,848
  5,189
  5,543
  5,911
  6,294
  6,692
  7,107
  7,539
  7,989
  8,457
  8,946
  9,456
  9,989
  10,545
Issuance/(repayment) of debt, $m
  183
  683
  737
  788
  838
  886
  934
  980
  1,027
  1,073
  1,119
  1,166
  1,213
  1,261
  1,311
  1,363
  1,416
  1,472
  1,530
  1,591
  1,655
  1,722
  1,793
  1,868
  1,947
  2,030
  2,118
  2,210
  2,308
  2,411
  2,520
Issuance/(repurchase) of shares, $m
  -179
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  39
  683
  737
  788
  838
  886
  934
  980
  1,027
  1,073
  1,119
  1,166
  1,213
  1,261
  1,311
  1,363
  1,416
  1,472
  1,530
  1,591
  1,655
  1,722
  1,793
  1,868
  1,947
  2,030
  2,118
  2,210
  2,308
  2,411
  2,520
Total cash flow (excl. dividends), $m
  -530
  1,851
  1,970
  2,188
  2,416
  2,656
  2,907
  3,168
  3,440
  3,723
  4,017
  4,223
  4,540
  4,869
  5,211
  5,566
  5,936
  6,319
  6,718
  7,134
  7,566
  8,016
  8,485
  8,975
  9,485
  10,018
  10,575
  11,156
  11,764
  12,400
  13,064
Retained Cash Flow (-), $m
  -436
  -446
  -477
  -510
  -542
  -574
  -604
  -635
  -665
  -695
  -725
  -755
  -785
  -817
  -849
  -882
  -917
  -953
  -990
  -1,030
  -1,071
  -1,115
  -1,161
  -1,209
  -1,260
  -1,314
  -1,371
  -1,431
  -1,494
  -1,561
  -1,631
Prev. year cash balance distribution, $m
 
  798
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,203
  1,493
  1,678
  1,874
  2,082
  2,302
  2,533
  2,775
  3,028
  3,292
  3,468
  3,755
  4,053
  4,362
  4,684
  5,019
  5,367
  5,728
  6,104
  6,495
  6,901
  7,325
  7,766
  8,225
  8,704
  9,204
  9,725
  10,270
  10,839
  11,433
Discount rate, %
 
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
 
  2,108
  1,361
  1,451
  1,530
  1,596
  1,647
  1,681
  1,698
  1,697
  1,677
  1,593
  1,542
  1,476
  1,395
  1,302
  1,200
  1,091
  979
  865
  753
  646
  545
  452
  368
  294
  230
  177
  133
  97
  70
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Amphenol Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of electrical, electronic, and fiber optic connectors worldwide. It operates through two segments, Interconnect Products and Assemblies, and Cable Products and Solutions. The Interconnect Products and Assemblies segment offers connector and connector systems, including fiber optic, harsh environment, high speed, and radio frequency interconnect products, as well as antennas; power interconnect products, bus bars, and distribution systems; and other connectors. It also provides value-add products, such as backplane interconnect systems, cable assemblies and harnesses, and cable management products; and other products comprising antennas, flexible and rigid printed circuit boards, hinges, molded parts, production-related products, sensors and sensor-based products, and switches. The Cable Products and Solutions segment offers coaxial, power, and specialty cables; cable assemblies; and components comprising combiner/splitter products, connector and connector systems, and fiber optic components. The company sells its products through its sales force, independent representatives, and a network of electronics distributors to original equipment manufacturers, electronic manufacturing services companies, original design manufacturers, and communication network operators in the automotive, broadband communication, commercial aerospace, industrial, information technology and data communication, military, mobile device, and mobile network markets. Amphenol Corporation was founded in 1932 and is headquartered in Wallingford, Connecticut.

FINANCIAL RATIOS  of  Amphenol Cl A (APH)

Valuation Ratios
P/E Ratio 27.1
Price to Sales 3.5
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow 20.7
Price to Free Cash Flow 25.1
Growth Rates
Sales Growth Rate 12.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11%
Cap. Spend. - 3 Yr. Gr. Rate 3.9%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 71.7%
Total Debt to Equity 81.9%
Interest Coverage 18
Management Effectiveness
Return On Assets 10.9%
Ret/ On Assets - 3 Yr. Avg. 11.2%
Return On Total Capital 12.9%
Ret/ On T. Cap. - 3 Yr. Avg. 13.2%
Return On Equity 23.8%
Return On Equity - 3 Yr. Avg. 24.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 32.5%
Gross Margin - 3 Yr. Avg. 32%
EBITDA Margin 22.7%
EBITDA Margin - 3 Yr. Avg. 22.8%
Operating Margin 19.2%
Oper. Margin - 3 Yr. Avg. 19.5%
Pre-Tax Margin 18.2%
Pre-Tax Margin - 3 Yr. Avg. 18.4%
Net Profit Margin 13.1%
Net Profit Margin - 3 Yr. Avg. 13.4%
Effective Tax Rate 27%
Eff/ Tax Rate - 3 Yr. Avg. 26.7%
Payout Ratio 21%

APH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the APH stock intrinsic value calculation we used $6286 million for the last fiscal year's total revenue generated by Amphenol Cl A. The default revenue input number comes from 2016 income statement of Amphenol Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our APH stock valuation model: a) initial revenue growth rate of 15.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for APH is calculated based on our internal credit rating of Amphenol Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Amphenol Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of APH stock the variable cost ratio is equal to 80.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for APH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Amphenol Cl A.

Corporate tax rate of 27% is the nominal tax rate for Amphenol Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the APH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for APH are equal to 14.5%.

Life of production assets of 18.9 years is the average useful life of capital assets used in Amphenol Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for APH is equal to 18.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3675 million for Amphenol Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 304.623 million for Amphenol Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Amphenol Cl A at the current share price and the inputted number of shares is $22.0 billion.


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COMPANY NEWS

▶ Amphenol beats Street 1Q forecasts   [08:12AM  Associated Press]
▶ Amphenol Corp. Value Analysis (NYSE:APH) : April 21, 2017   [Apr-21-17 03:20PM  Capital Cube]
▶ IIROC Trade Resumption - APH   [Apr-11-17 10:18AM  CNW Group]
▶ IIROC Trading Halt - APH   [10:15AM  PR Newswire]
▶ Aphria Inc. Opens the Market   [10:45AM  PR Newswire]
▶ Aphria Inc. Opens the Market   [10:45AM  CNW Group]
▶ Amphenol Is a Great Tech Stock to Buy Now   [Mar-03-17 01:28PM  TheStreet.com]
▶ Amphenol Announces First Quarter 2017 Dividend Payment   [Feb-02-17 08:00AM  Business Wire]
▶ Amped-Up Amphenol Needs to Settle Down   [Sep-01-16 03:56PM  at TheStreet]
▶ 4 Top Tech Stocks That Beat Earnings May Be Strong Buys Now   [Aug-09-16 08:35AM  at 24/7 Wall St.]
▶ RBC Analysts Have Spotted 4 Top Momentum Stock Buys   [Aug-08-16 10:25AM  at 24/7 Wall St.]
▶ 5 NYSE Stocks Hitting 52-Week Highs Yesterday   [Jul-21-16 12:59PM  at Insider Monkey]
Stock chart of APH Financial statements of APH
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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