Remembrance of Stocks Past

At the end of last year, I decided to remove Amphenol (APH) from our Buy List. The stock had a great run in 2009 as it gained 91%. Even though I still like the company, which makes electronic and fiber optic connectors, I thought the stock needed to rest.
It looks like I was right. Through yesterday’s close Amphenol was down 5% for the year. I’m happy to see that the stock is up nicely today on news of very strong earnings.

The company earned $98.4 million, or 56 cents per share, up 32 percent from $74.4 million, or 43 cents per share, in the same period a year earlier.
Excluding a tax-related gain, it earned 55 cents per share in the latest quarter.
Revenue rose 17 percent to $771 million from $660 million. Currency translation boosted sales by about 2 percent, or $15 million.
Analysts, on average, were expecting a profit of 51 cents per share on revenue of $749.2 million, according to a poll by Thomson Reuters.

If business continues to improve the stock is reasonably priced, I’d love to welcome APH back to the Buy List.
Another former Buy List stock, Harley Davidson (HOG), is having a good day. The stock was a member of the Buy List in 2006, 2007 and 2008. HOG did well in 2006, but after that, it was an awful pick for us. I let it go last year and, wouldn’t you know, the shares sprung to life so my timing with HOG isn’t so good.
Today’s news is that profits plunged…but beat expectations!!

Harley-Davidson Inc. said Tuesday its first-quarter profit fell 72 percent as sales of its high-end bikes remained sluggish.
Harley-Davidson CEO Keith Wandell said the uncertain economy is likely to make business conditions challenging throughout the year.
Still, the Milwaukee company’s results beat analysts’ forecasts, and investors were cheered by a return to profitability at its financial services unit. The stock gained $2.58, or 7.9 percent, to $35.35 in morning trading.
Harley-Davidson reported a profit of $33.3 million, or 14 cents per share, in the three months ended March 28. That’s down from $117.3 million, or 50 cents per share, during the same period last year.
Excluding losses from discontinued operations, the Milwaukee company made 29 cents per share. Revenue during the quarter fell 19 percent to $1.04 billion.
Analysts expected a profit of 22 cents per share on $1.02 billion in revenue. Such estimates typically exclude one-time items.

HOG is now up more than four-fold from its March 2009 low. Before I’d add it to the Buy List, I’d like to see its profits growing again.

Posted by on April 20th, 2010 at 12:16 pm


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