Baron Asset Fund on Amphenol Corporation
Thesis
Amphenol's shares recovered after previously selling off on concerns that copper interconnect products could eventually be displaced by optical technologies. Baron believes management can capture more than its fair share of the optical market just as it did in copper, helped by the acquisition of CommScope's connectivity and cable solutions business. The company's decentralized entrepreneurial structure and long history of successful acquisitions support its ability to adapt as technology changes. Baron therefore maintains conviction in Amphenol's long-term growth opportunity even as interconnect technology evolves.
“We believe Amphenol is well positioned to maintain a leading role even as interconnect technologies evolve from copper to optical”
Key risks
- Copper interconnect products may be displaced by optical interconnects where Amphenol's market position is currently less established