Celestica Inc (CLS.TO)

Do outsource contract manufacturing. In the top 5% of his database. Over the last 2 years they have been diversifying away from high-volume commodity hand sets, etc., and towards a more stable and high-margin long product cycles that occur in medical and aerospace. Has a 12.5% forecast return on equity and 8.5% trailing free cash flow yield. Cash of $483 million.

He has a problem with the business. It is a manufacturing stock with very low margins. They have done well for a long time, but you have to compare them to other manufacturing stocks and it does not look that cheap. Hold at best or sell to stick the money somewhere else in real technology.

This stock looks great. Had a nice breakout at around $11.50. Shows lower volume, but that is typical in the summer anyways.

Not on his Stock Watch list because it had a tremendous run. You always have to watch how much compensation management gets, what the board gets, etc. Have good people on the board, but generally speaking boards always want to be well compensated.

Established an upward trend, is trading above its 20 day moving average, and it is outperforming the TSX. These three indicators all say to buy this one. But he suggests taking some profits not too far down the road.

One of the great Canadian tech companies. Chart shows a long trend from late 2012 that has been broken recently, but what is interesting is that the recent top, that took place halfway through 2013, was broken. It is kind of testing that top at $11.50-$12. Wouldn’t want to see it break that top, but so far it is reasonably healthy. If you are looking to Buy wait to see if it will hold, and then Buy as it starts to move up.

Has a bit of a more positive chart than the rest of the sector. Made several attempts to break out above $11.40, which it finally did and now it is coming back to test it. Right here at, $11.40-$11.70 is a pretty good entry point. Some of the indicators are kind of coming off and we are getting rid of some of the overbought situation.

Chart shows the stock has recently developed a downward trend and recently broke a support level. It’s underperforming the Canadian market and trading below its 20 day moving average. Technicals score out of 3 is 0. There are better opportunities elsewhere.

Info tech stocks are starting a new life in Canada and the US. This is one of them. Broke a major down trend line a while back. It was base building for 10 years and is not in an uptrend.

Pulled back a month or so ago. When you have Cisco (CSCO-Q) as a customer and it has a slowdown that is a concern. On the other side, one of their competitors had a pretty bad report. Has quite a bit of cash in the balance sheet and if you strip that out it looks very attractive on a multiple basis. Good cash generation. Feels there is a bit of room for the stock to run.

Company is more into buying back stock than dividends but that is the reason to own it. Good management team and margins continue to increase. Don’t sell.

In contract manufacturing, he has seen spots of growth throughout the group, especially the ones in the US. They get going and then they stall. He likes to see more strength. This one has a model price of $17.77, a 66% upside. Thinks we just need a little bit of confidence in those earnings plus a little bit of forward guidance as to if products are sustainable.

Was really beat up recently. A pretty big pullback. CSCO is one of their big customers. 10 times earnings excluding cash value. It is a great entry point.

There has been a long consolidation from 2011. Broke out in the middle of this year and had a parabolic move. After every parabolic move, it needs a period of consolidation. That is precisely what it is doing right now and is very healthy for the stock. If it can take the old 2011 high out, which he would bet it will, it will be very good. Wait for a breakout before buying. If you own, continue to hold.

Trying to break out but has not been able to. Resistance at 11.50 to $12.00. A long as we see it going higher it is okay.