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CLS STOCK WRITE UP


CLS (CELESTICA)

  • P/E: 15.1
  • GAAP DILUTED EPS Y-O-Y GROWTH LAST QUARTER: $.14
  • SECTOR: ELECTRONIC TECHNOLOGY
  • ASSETS-LIABILITIES: 1.78
  • DIVIDEND: none

Celestica, a spinoff from IBM, manufactures electronics and provides supply chain services for a variety of businesses. The company has successfully improved upon its operating margins and revenue during its last fiscal year. Reporting April 20th before market open, the company will try to beat Wall street expectations of $.28 and its own guidance of $.24-$.3.
Celestica provides services for the communications, consumer, server, and storage industries, as well as working in diversified companies. This wide array of services gives Celestica the opportunity to expand on revenue when one of its segments is lagging. Rather than developing new products to boost revenue, Celestica must rely on increasing customer satisfaction by managing supply chains well for its clients. In order to showcase their services, the company recently built a new customer service center where clients can interact with agents observe demonstrations of Celestica's services. The company's supply chain management business is a product of its own journey to establishing a successful in-house contract manufacturing process. Therefore, its supply chain management not only boosts revenue organically, but it improves the company's manufacturing business, as well. The company sells design and engineering services, manufacturing, logistics, after-market, supply chain services, and precision machining to its clients.
The company's CEO, Rob Mionis, has a wealth of experience, having held the same title with StandardAero, and other high-ranking positions with Honeywell, and private equity. The company saw slight reduction in its free cash flow in FY 2016, but its operating margin, revenues, and assets-liabilities ratios all improved. The only recent change to the core company's leadership is the addition of Thomas Gross, former COO of the electrical sector of energy giant Eaton.
With a low P/E, recent growth, and a solid balance sheet, the company could grow without becoming overvalued. Earnings expectations from both wall street and the company would not buck the current trend if surpassed. The company has 4 “buy” and 8 “hold” ratings, according to the Wall Street Journal.

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