Danesh RohintonCelestica IncCLS.TOSELLJul 25, 2024

Canadian tech that's done well. Likes it, continuing to own going forward.

It's a manufacturing company. Can they continue to grow at this level and justify a high multiple? The market overestimates their earnings and margins. So when AI emerges, you see a strong pullback. Be cautious with stocks like this which aren't consistent over time. View their PE as a manufacturing and not a tech company.

He took some profits just last week. His 12-month target is $650. Buy in thirds here ~$500, $450, and $400 (note that he rarely gets this last third of any position). Darling of Canadian networking companies. Next earnings report at beginning of July.

Helps build hardware behind AI and cloud infrastructure. Massive growth. Revenue jumped more than 50% last quarter. Moving into products with better margins, increasingly important in AI supply chain.

Expectations are high. She sees upside potential of 30%, price target of ~$625. No dividend.

Not trading cheap. A triple in the last year. He's a value investor. He can't explain or understand the multiple. It's for momentum-type traders. He wouldn't be involved here.

All-time high today. If you own it, sell some calls (1-2 weeks) around the $535-545 level. You probably don't want to get called away, so if it gets close just roll the price up. 

It had a good uptrend till the end of 2025, then has been sideways. It has tested support at $340-350 with resistance at $500. Now it seems to be in an upswing during a sideways trend. Not bad news.

With reference to the question he would not short the stock. It has seen a 100% gain per year over the past 3 or 4 years so has had a tremendous turn-around. There is lots of volatility and the recent pull back gives a buying opportunity. 

A name for core AI exposure. Valuation of mid-20x PE is justified, so much demand. Recent earnings and outlook were quite positive. Manages expectations, so every quarter is "a beat and a raise".

Radical transformation a few years ago. Its components are right in the wheelhouse of data centre growth, and he finds it difficult to know how long that will last. His main issue is the stretched valuation.

His go-to name in the space is TSM, also at a high valuation now.

A winner in the AI build-out: cloud infrastucture, high-speed networking and other AI-related systems. Also, they supply aerospace/defence where defence budgets have increased. Third, they're in healthtech devices. All businesses are drivers, especially AI. A lot of growth is baked into the stock, but buy on any dips, on headline about any data centres being delayed.

Instead, they own AVGO in their global fund. CLS is sort of riding the coattails of AVGO by packaging components to sell to the end consumer. Benefiting from growth in TPUs that AVGO and GOOG have been delivering. Thinks that trend will continue.

Two years ago, traded at 10x PE. Now trades at 30-35x. Lots of other companies out there do this type of work. In an eventual slowdown, may see margin and volume pressure. Could be quite volatile from here, and he'd take profits so you're just left with the house's money.

Very expensive at these levels (especially for a manufacturing company), don't buy here. Thinks we'll get a pullback, especially if there's a hiccup with all the AI stuff. New money is better spent in other areas.

Greatly benefits from the AI trade, but now at a premium valuation. Has executed well.

A long position for him. Winning in its marketplace. Supplying data centre development. If there's risk to data centres, then there's risk to this name. Trading above the 50-day MA. He's going to keep it on a pretty tight leash. Wouldn't buy today. Technically, challenges on the AI trade right now.

Doesn't like the way the NASDAQ opened up 2.4% early this morning and then reversed and is now down on the day. Not a great technical sign.