Celestica Inc (CLS.TO)

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.

A comeback story that has done better than expected. Has come back to the same level that it was in 2011. This is a seasonal period when you get these types of industrial stocks doing well. Right now it is in an upper trend and given where we are right now, he feels this is a favourable trend. Once it’s through the $11.90 level he expects it to do quite well.

(A Top Pick Sept 28/12. Up 66.43%.) Had a very strong quarter but was mixed in terms of their guidance. They were exiting the BlackBerry business and people were really worried if they were going to be able to replace it. However, they have started to replace it with higher margin business. Going forward, he feels their margins are going to increase. Has exited most of his position but still has some in one of his funds.

Very hinged to data communications and telecom equipment cycle, which he thinks, is just starting to rejuvenate itself. Feels it has 5 to 10 years of fantastic growth ahead of it. Not very expensive.

One of the Canadian technology companies. Has been showing improvement of late. If you take their cash into account, they are trading at about 8X earnings. Generates a ton of free cash flow. When a company has a big cash flow, they either buy back stock, make a dividend or make an acquisition. This company has been very clear that they want to get into a more diversified segment outside of communications, higher margins and more growth.

Lost their phone contract with blackberry but a year ago they said they were moving away from designing and making of cell phones and were moving into the medical and aero spaces. The advantage is, it takes a long time to get into those industries but once you are in, you are there for 7-10 years. A free cash flow generating machine. Have $554 million in cash, 29% of the market cap of the company.

(Top Pick Sep 28/12, Up 39.26%) Replaced RIM with higher margin business. He has taken quite a bit off the table. But it is still not an expensive stock. They may pay a dividend this year. Great balance sheet. He thinks it is fairly valued.

They have a lot of cash on the balance sheet; the amount of cash they generate. They have land value. If you take that up they are trading at 8 times earnings. They are not anywhere near highs. As margins go up with acquisitions, the share price should go up.

(Market Call Minute) Great cash flow and a catalyst in the next 3 to 4 months.

Do manufacturing and design work for large electronics companies. Doesn’t like the industry. Historically has been an extremely low margin business. It requires a fair bit of cash. Very price competitive. Doesn’t see any real great growth prospects.