TE Connectivity plc

“TE Connectivity is a well-run, capital-light compounder with a multi-layered design-in moat, ~18.5% ROIC, strong FCF generation ($3.2B in FY2025), and credible structural tailwinds from EV electrification and AI infrastructure — but at 15.8x forward earnings and ~5.5% FCF yield, the stock is fairly valued, not cheap. The thesis is sound and long-term compounding is plausible at 2-3x over 10 years, but the absence of a margin of safety at current prices — combined with China revenue concentration (~20%) as a genuine structural impairment risk — argues for patience over urgency. The right action is to track for a pullback toward $165-175 where the risk/reward becomes genuinely compelling.”