Core Viewpoint - An overlooked part of the market, specifically industrial stocks, is performing exceptionally well in 2025, with UBS identifying 11 compelling buy-rated investment ideas in this sector [2][4]. Group 1: Market Performance - Industrial stocks in the S&P 500 have increased by 15.2% year-to-date, surpassing the benchmark index's rise of 12% [3]. Group 2: Recommended Stocks - UBS highlighted the following companies as strong investment opportunities: - **Woodward (WWD)**: Year-to-date performance of +42%, with expectations of expanding margins and doubling free cash flow (FCF) in the coming years, leading to revenue, EBITDA, and FCF estimates 3%, 6%, and 11% above consensus for FY26 [5]. - **Alaska Air Group (ALK)**: Year-to-date performance of -9%, with confidence in long-term earnings power due to premium seat expansion and easing competitive pressures [6]. - **CSX Corporation (CSX)**: Year-to-date performance of +1.5%, with multiple drivers of EPS growth anticipated and a reduction in operating costs by approximately $100 million in 2026 [7]. - **TE Connectivity PLC (TEL)**: Year-to-date performance of +49%, with strong exposure to AI growth and signs of recovery in other lagging end-markets [8].

Group 1 - Nvidia is set to acquire a stake in Intel, indicating a strategic move in the semiconductor industry [4] - TE Connectivity has gained attention from mutual funds, with its stock appearing on IBD's list of new buys for the second consecutive month, highlighting investor interest [1] - Major tech companies including Tesla, Alphabet, Amazon, Apple, and Meta Platforms have supplier connections with TE Connectivity, suggesting a strong network within the industry [1] Group 2 - The stock market is reacting positively, with Dow Jones futures signaling potential new highs following the Federal Reserve's recent actions [4] - Meta Platforms is under scrutiny as it navigates potential regulatory challenges, particularly regarding its TikTok deal [4] - Tesla has settled two more lawsuits related to its Autopilot feature, although investor reactions appear muted [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: TE Connectivity (TEL) - TE Connectivity currently holds a Momentum Style Score of B, indicating potential as a solid momentum pick [2][3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [3] Price Performance - TEL shares have increased by 0.52% over the past week, while the Zacks Electronics - Miscellaneous Components industry remained flat [5] - Over the past month, TEL's price change is 4.51%, outperforming the industry's 3.72% [5] - In the last quarter, TEL shares rose by 27.68%, and over the past year, they gained 43.83%, compared to the S&P 500's increases of 10.17% and 18.61%, respectively [6] Trading Volume - TEL's average 20-day trading volume is 1,471,580 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 7 earnings estimates for TEL have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $8.27 to $8.60 [9] - For the next fiscal year, 7 estimates have also moved upwards without any downward revisions [9] Conclusion - Considering the positive price trends and earnings outlook, TEL is classified as a 2 (Buy) stock with a Momentum Score of B, making it a recommended pick for near-term investment [11]

Market Overview - The broader equity markets have reached all-time highs, driven by optimism regarding a potential interest rate cut by the Federal Reserve despite concerns about the economy and a slowdown in the labor market [1] - The consumer price index increased by 0.4% for the month, surpassing expectations of a 0.3% rise, while only 22,000 jobs were added in August, indicating soft labor market conditions [1] Investment Strategy - Investors are adopting a wait-and-see approach regarding the central bank's monetary policy and its outlook on economic growth and inflation, which may influence future rate cuts [2] - Identifying "cash cow" stocks with high returns is essential, but it must be supported by attractive efficiency ratios like return on equity (ROE) [2][3] Importance of ROE - ROE, calculated as Net Income divided by Shareholders' Equity, helps investors differentiate between profit-generating companies and those that are not, indicating financial health [3] - A higher ROE signifies effective management in generating profits without new equity capital, thus rewarding shareholders with attractive risk-adjusted returns [4] Stock Screening Parameters - Stocks were shortlisted based on criteria including Cash Flow greater than $1 billion and ROE exceeding the industry average [5] - Additional metrics include Price/Cash Flow lower than the industry average, Return on Assets (ROA) greater than the industry average, and 5-Year EPS Historical Growth exceeding the industry average [6][7] Featured Stocks - **Arista Networks Inc. (ANET)**: Engaged in cloud networking solutions with a long-term earnings growth expectation of 18.7% and a trailing four-quarter earnings surprise of 12.8%, holding a Zacks Rank 1 [8][9] - **TE Connectivity plc (TEL)**: A global technology company with a long-term earnings growth expectation of 9.8% and a trailing four-quarter earnings surprise of 4.9%, holding a Zacks Rank 2 [10][11] - **Corning Incorporated (GLW)**: Focused on glass technologies with a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.7%, also holding a Zacks Rank 2 [12] - **Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)**: Provides banking services with a long-term earnings growth expectation of 10% and a trailing four-quarter earnings surprise of 7.4%, holding a Zacks Rank 2 [13] - **AppLovin Corporation (APP)**: Offers software solutions for advertisers with a long-term earnings growth expectation of 20% and a trailing four-quarter earnings surprise of 22.4%, holding a Zacks Rank 1 [14]

Core Insights - Fabrinet (FN) and TE Connectivity (TEL) are key players in the electronics and industrial markets, with FN specializing in high-precision optical components and TEL in connectivity and sensor solutions [1][2] - Both companies are positioned to benefit from growth drivers such as artificial intelligence infrastructure, electric vehicles, and industrial automation, making them direct competitors in high-growth connectivity markets [2] Fabrinet (FN) Overview - Fabrinet is recognized for its contract manufacturing of high-end optical communications equipment, serving major clients like NVIDIA and Cisco [3] - In Q4 fiscal 2025, Fabrinet reported revenues of $910 million, a 21% increase year over year, with optical communications contributing $689 million, reflecting a 15% rise [3][4] - The company’s optical packaging capabilities are crucial for AI infrastructure, with data center interconnect revenue growing 45% year over year to $107 million [4] - The Zacks Consensus Estimate for optical communications revenues in Q1 fiscal 2026 is $699.92 million, an 11.8% increase year over year, with earnings projected at $2.83 per share, up 2.2% [4] Risks for Fabrinet (FN) - Fabrinet faces near-term challenges, including component supply constraints and margin pressure from new product launches [5] - The company has a high concentration risk, with NVIDIA accounting for 28% of fiscal 2025 revenues and the top 10 customers making up 86% [5] TE Connectivity (TEL) Overview - TE Connectivity is a diversified technology leader providing connectivity and sensor solutions across various markets, including transportation and industrial sectors [6] - In Q3 fiscal 2025, TEL reported revenues of $4.53 billion, a 14% increase year over year, with margins near 20% in both Transportation and Industrial segments [6][7] - TEL anticipates over $800 million in AI-related revenue for fiscal 2025, more than double the previous year [8] Strengths of TE Connectivity (TEL) - TEL's localized manufacturing, with over 70% of production near customers, mitigates supply chain risks [9] - The company’s strong free cash flow supports shareholder returns and strategic acquisitions, enhancing its competitive position [9] Share Performance and Valuation - Year-to-date, Fabrinet shares have increased by 69.5%, while TE Connectivity shares have appreciated by 47.1% [10] - Fabrinet trades at a higher price-to-sales (P/S) ratio of 3.93 compared to TEL's 3.78, reflecting greater risks associated with customer concentration and cyclical demand [13] Conclusion - Both companies are integral to the electronics ecosystem, with Fabrinet focusing on high-speed optical communications and TEL offering diversified exposure across multiple markets [16] - TEL is recommended as a better investment option due to its diversified market presence and strong cash flow, compared to Fabrinet's concentrated customer base and cyclical risks [16]

Core Viewpoint - The article discusses the recent apology from TEL's president, Kawai Toshiki, to TSMC regarding a 2nm technology leak incident, highlighting the importance of maintaining confidentiality in the semiconductor industry [3][4]. Group 1: Incident Overview - Kawai Toshiki's absence from the SEMICON Taiwan exhibition was noted, as he met with TSMC's chairman, Wei Zhejia, to address the 2nm technology leak [3]. - The leak involved a former TSMC engineer who allegedly shared confidential information with TEL to enhance their equipment performance [4]. Group 2: Legal Implications - Three individuals involved in the leak have been prosecuted, facing prison sentences of 14 years, 9 years, and 7 years respectively [3]. Group 3: Industry Context - TEL is a major supplier in the semiconductor equipment market, with TSMC being a key customer, emphasizing the critical relationship between suppliers and manufacturers in the semiconductor ecosystem [3].

Company Overview - TE Connectivity plc (TEL) is based in Ballybrit, Ireland, and specializes in manufacturing and selling connectivity and sensor solutions, with a market cap of $61.4 billion [1] - The company serves various industries, including automotive, industrial equipment, communications, aerospace, defense, and medical [1] Market Position - TEL is classified as a "large-cap stock" due to its market cap exceeding $10 billion, highlighting its size and influence in the electronic components industry [2] - The company's strength lies in its diversified product portfolio of connectors and sensors, essential for power, data, and signal transmission [2] Stock Performance - TEL's shares are currently trading 2.3% below their 52-week high of $212.76, reached on July 29 [3] - Over the past three months, TEL's shares have increased by 26.3%, outperforming the Technology Select Sector SPDR Fund's (XLK) return of 11.1% [3] Long-term Growth - In the past 52 weeks, TEL's stock has surged by 45%, compared to XLK's 29.9% increase [4] - Year-to-date, TEL shares are up 45.4%, while XLK has risen by 13.9% [4] - TEL has consistently traded above its 200-day moving average since early May and above its 50-day moving average since late April, confirming a bullish trend [4] Recent Earnings - TEL's shares rose by 12% on July 23 following a strong Q3 earnings release [5] - The company reported a 30% year-over-year revenue increase in its industrial solutions division, contributing to an overall revenue growth of 13.9% to a record $4.5 billion, exceeding consensus estimates by 5.1% [5] - Adjusted EPS reached a record high of $2.27, marking an 18.8% increase from the previous year and 9.1% above Wall Street expectations [5] - The industrial solutions segment experienced a notable 390 basis points expansion in adjusted operating margin, enhancing profitability [5]

Group 1 - Broader equity markets reached all-time highs, driven by NVIDIA's strong quarterly performance and a healthy economy, with NVIDIA reporting a 56% revenue growth [1] - The U.S. GDP grew at an annualized rate of 3.3% for the April-to-June period, surpassing expectations and indicating robust economic strength [1] Group 2 - The core personal consumption expenditures price index for July was recorded at 2.9%, slightly higher than June, but not expected to hinder potential interest rate cuts by the Federal Reserve [2] Group 3 - Investors are advised to focus on "cash cow" stocks with high returns, emphasizing the importance of return on equity (ROE) as a key metric for identifying financially healthy companies [3][4] - High ROE indicates effective reinvestment of cash at high returns, helping to distinguish between profit-generating companies and those that are not [5] Group 4 - Screening parameters for identifying cash-rich stocks include cash flow greater than $1 billion, ROE above industry average, price/cash flow ratio lower than industry, return on assets (ROA) greater than industry, and strong historical EPS growth [6][7] - Stocks that qualified based on these criteria include NVIDIA, Arista Networks, TE Connectivity, Corning, Banco Bilbao, and AppLovin [8] Group 5 - Arista Networks specializes in cloud networking solutions and has a long-term earnings growth expectation of 16.6% with a trailing four-quarter earnings surprise of 12.8% [9][10] - TE Connectivity focuses on connectivity and sensor solutions across various industries, with a long-term earnings growth expectation of 9.8% and a trailing four-quarter earnings surprise of 4.9% [11][12] - Corning, known for its advanced glass technologies, has a long-term earnings growth expectation of 18.2% and a trailing four-quarter earnings surprise of 4.7% [12][13] - Banco Bilbao provides a range of banking services and has a long-term earnings growth expectation of 6.9% with a trailing four-quarter earnings surprise of 7.4% [13][14] - AppLovin offers software solutions for advertisers and has a long-term earnings growth expectation of 20% with a trailing four-quarter earnings surprise of 22.4% [14][15]

Group 1: Industry Trends - The importance of electronic water pumps and oil pumps in the thermal management and lubrication systems of new energy vehicles (NEVs) is increasing, with an expected global demand for electronic water pumps reaching 80 million units by 2025, reflecting a compound annual growth rate (CAGR) of 18% [2] - The market size for electronic oil pumps in hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) is projected to reach $1.5 billion by 2025, with a CAGR of 12%, driven by the rising penetration of hybrid models [2] Group 2: TE Connectivity's Innovations - TE Connectivity will showcase its innovative solder-free connection solutions at the NEIC 2025 forum, emphasizing efficiency, sustainability, and the elimination of traditional soldering challenges [5][18] - TE's solder-free technology aims to address industry pain points such as efficiency issues, process difficulties, and environmental requirements, providing reliable and durable solutions in harsh conditions [3][4][5] Group 3: Featured Products - The CLUSTER BLOCK connector allows direct connection without stripping insulation, designed for harsh environments [7] - The AMPLIVAR terminal enables infinite connections without stripping insulation, ensuring airtight connections [9] - The NANO MAG-MATE terminal features a compact design for micro motors, showcasing TE's commitment to innovative connection solutions [18] Group 4: Event Details - The NEIC 2025 forum will take place from September 17-19 in Changzhou, featuring various sessions on industry development, smart integration trends, and material innovations [19] - The event is co-organized by TE and ONEYAC, highlighting the collaboration in promoting advanced electronic components and solutions [19][22]

Core Viewpoint - Telenor's Finnish subsidiary KNL has secured contracts worth €15 million under a ten-year framework agreement with the Finnish and Swedish Armed Forces, highlighting the increasing demand for secure communication solutions amid geopolitical uncertainties in Europe [1][2]. Company Overview - KNL specializes in advanced high-frequency (HF) communication solutions that provide encrypted and resilient connectivity, capable of automatic connection in under one second, even in jamming conditions [3][6]. - The company became part of Telenor in 2020 and has focused on secure defense communications, engaging with NATO countries and running pilots with Norway's Defence Research Establishment [6][7]. Industry Context - The contracts are part of a broader ten-year framework agreement with NORDEFCO, aimed at enhancing joint procurement and interoperability among Nordic nations, with potential extensions to additional NATO countries [4]. - The growing demand for secure communication solutions is underscored by the current complex security environment, emphasizing the importance of KNL's technology in strengthening regional security [2][5]. Future Outlook - KNL is ramping up production to meet increasing market demand, with several countries expressing interest in testing and adopting its solutions, indicating strong potential for future orders [5][7]. - Initial deliveries to the Finnish and Swedish armed forces are expected to be completed by the end of the year [4].