Q: Why is Celestica so volatile? Having just lost money on a stock, I'm gun shy to lose more on another one that I might be buying at a high. Do you have confidence buying here at this level? I know we can't be certain but do you think it's one of the better tech stocks to buy into today? Thanks.
5i Research Answer:
CLS is a large liquid stock with a US stock listing. US investors like its low valuation relative to peers, its high growth rate and its record of exceeding earnings estimates. It has also, essentially, become a proxy for the AI trade in Canada, which does not have a whole lot of large cap AI-connected companies. Then we have profit-taking: whenever a stock is up 221% in a year, any sniff of a problem or market hiccup causes a lot of investors to sell quickly and take easy profits. We remain confident in its future and would be comfortable buying/owning this.