Celestica Inc (CLS.TO) Buy, Sell or Hold

Celestica Inc (CLS.TO)

487.91

+4.82 (1.00%)

as of Sep 22, 2026, 2:23:00 pm Market Open.

213 watching

DON'T BUY

Been in a tough business for a long, long time. Margins remain very tight because of so much competition. Doesn’t see it as being an attractive industry. Prefers companies that have branded products that have been beaten up, but the brand is solid and the business model works as opposed to contract manufacturing.

WATCH

Low margin business, but lots of cash. Doing a big share buyback and that will help the bottom line. A dividend would be nice. He is sitting on the side lines waiting for improvements in the economy. They have struggled as the economy has slowed down.

COMMENT

A custom manufacturer of electronics. Their manufacturing of RIM products is coming off contract so it has risks to it but it is also extremely cheap. Recently announced a share buyback. Feels that management realizes that if they can shrink capitalization, returns will improve.

PAST TOP PICK

(A Top Pick April 23/12. Down 12.08%.) Got stopped out at $8.18 at a loss of 2.2%.

DON'T BUY

They lost a contract recently and another a while back. They are doing buy backs but he wishes they would give a dividend instead. Just a blue blood company. A lot of the board are overpaid. A lot of business was RIM-based. Loosing this really hurts. When he filters again, this one might come up.

TOP PICK

Strong balance sheet. Research in Motion (RIM-T) was their largest client and will be stopped in the next quarter or so. It was a lower margin business with them. Thinks it has been oversold. Stock is $7 and they have $2.90 in cash per share. Analysts expect them to earn $.88 this year so if you strip out the cash, the stock is trading at about 4.5X earnings. Thinks you’ll be able to see $10.

BUY

Well managed company. Overhang from Research in Motion (RIM-T) business has disappeared. It was 19% of their business and they were carrying a lot of inventory for them. Much more diversified than it used to be. Looking at defence, consumer electronics and it’s got servers. Growth rate will not be dramatic. Have some capacity to develop now that RIM is gone which he expects will have a slight effect on margins. Potential for some significant margin improvement. Really cheap compared to the other EMS manufacturers.

TOP PICK

Has been building a huge base since 2004 and he believes it is on the verge of starting an up leg.

COMMENT

Thinks of it as a manufacturer rather than a text company. Doesn’t have a lot of R & D and there are a lot of players. Margins are very thin. Well run and global but is going to be cyclical. Big risk if they lose a client. Stock should perform with technology where you are seeing a bottoming of some of the semi-conductor stocks.

DON'T BUY

Not a company at this point in time that he is interested in. Feels people there are overpaid. Seems to have difficulty gaining traction. There are a lot of companies that are of greater interest to him.

DON'T BUY

Low value added component assembly with relentless pressure to lower prices.

BUY

Good business but earnings stream is a bit volatile. One risk is that RIM orders (20% of business) go down.

BUY

Likes this at this point. Part of their decline was due to the Japanese situation in and the view of supply chain issues, etc. All of their plants are now in Asia. Has about $4 a share in cash so there is opportunity for big dividend increases and maybe acquisitions.

BUY ON WEAKNESS

Fairly cheap but worries about how much value they can extract, as they don’t sell the end product. Financial multiples are attractive. Not sure this is the best time after their run up. In the wrong place of the value chain as they don’t get to keep any of the economic value themselves. Seem to be doing a better job of late.

DON'T BUY

Never really made anyone money unless you get it at the right stage in the cycle. Put stuff in boxes at very small margins for electronic and computer companies. When margins are squeezed, they squeeze Celestica’s margins.

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Celestica Inc (CLS.TO)