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ALERT: 1 Tech Stock That Could Double in Value

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Celestica (TSX:CLS)(NYSE:CLS) is a leading provider of electronics manufacturing services to original equipment manufacturers (OEMs) worldwide. The company operates 24 facilities located in the United States, Canada, Mexico, the United Kingdom, Ireland, Thailand, China, and Hong Kong. Celestica provides a wide variety of products and services, including the manufacture, assembly, and test of complex printed circuit assemblies.

Celestica provides memory and power products to customers. The company targets industry leading OEMs primarily in the computer and communications sectors. Celestica is a supplier to over 50 OEMs, including industry leaders. The company has a price-to-earnings ratio of 17.21, price-to-book ratio of 0.74, and market capitalization of $1.04 billion. Debt is very sparingly used at Celestica, as evidenced by a debt-to-equity ratio of just 0.43. The company has excellent performance metrics with an operating margin of 2.09% and a return on equity of 4.38%.

The products Celestica manufactures can be found in a wide array of end-products, including fax machines, hubs and switches, laser printers, mass storage devices, and medical ultrasound devices. Celestica’s principal competitive advantages are advanced manufacturing capabilities and leadership in the areas of quality, process and test technology, and supply chain management.

The company is an industry leader in advanced manufacturing technologies and employs a wide range of established and emerging process technologies. Celestica’s state-of-the-art manufacturing facilities are organized as customer-focused factories to provide superior customer satisfaction and manufacturing flexibility.

Celestica’s test capabilities are high quality and enable it to produce highly reliable products for customers, including products that are mission critical. Celestica’s size, geographic reach, and leading expertise in supply chain management allow it to procure material on a cost-accretive basis and to deliver products to customers faster, thereby reducing overall product costs and reducing the time to market.

Celestica continues to seek strategic acquisitions and has targeted Central Europe and South America as areas for near-term expansion. The company’s goal is to be the premier global full-service provider to leading OEMs through leadership in technology, quality, and supply chain management. Celestica appears to be uniquely positioned to achieve this goal given the company’s widely recognized skills in core areas of competency.

Celestica’s biggest challenge would be to develop profitable, strategic relationships with industry leaders primarily in the computer and communications sectors and to continually expand the breadth and depth of the services it provides to OEMs. The company appears to be making efforts to improve operating margins and selectively pursue strategic acquisitions.

There is incredible opportunity for the company to sell products to several industries that it does not participate in. Further, Celestica has developed a unique entrepreneurial, participative and team-based culture, which is driven by the desire to continually exceed customer expectations. This focus on the customer is likely to serve it well over the long term.

Successful implementation of the company’s strategy will allow Celestica to achieve superior financial performance and enhance shareholder value. Celestica’s skilled workforce and unique culture represent a distinct competitive advantage and are fundamentally important to achieving the strategic objectives.

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Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

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