Is a Bull Market Here? 4 Reasons to Buy Celestica Stock Like There’s No Tomorrow 

Celestica (TSX:CLS) stock has been a huge winner for investors this year, but there could be even more in the year to come.

| More on:
A bull outlined against a field

Image source: Getty Images.

While Nvidia (NASDAQ:NVDA) might be taking up all the headlines, companies associated with the hot stock have also been soaring high. One of these is Celestica (TSX:CLS), with shares climbing 220% in the last year alone!

Quite soon, we could be entering a bull market, making it a good time to pick up Celestica stock. Before we do, however, here are some points to consider. And here’s why you’re going to want to buy this stock in bulk.

Are we in a bull market?

First off, are we even in a bull market? A bull market isn’t anything official. A bull market is a period of sustained growth in financial markets. This is when assets or stocks are rising, and investors are optimistic. I’m afraid this doesn’t quite cover what we’re seeing right now.

A price would need to increase 20% or more from a low point, though, again, this isn’t a hard and fast rule. There would also need to be more investor confidence in buying. While we’re seeing some of that, it’s again nothing certain.

So, with that in mind, the TSX today doesn’t exactly apply. While there has been more than 20% growth since its lowest point, there doesn’t seem to be as much optimism here on the market as there is across the border. Yet this could certainly change in the near future should a strong Canadian economy return.

Why Celestica stock is one to consider

Beyond recent performance, Celestica stock has a lot going for it. The company is an electronics manufacturing company, similar to Nvidia stock. However, it holds a far more diverse range of programs and is more about testing rather than creating.

So, what’s been going on recently with Celestica stock that investors should be interested in? It comes down to earnings. During the fourth quarter, Celestica stock reported revenue of US$2.14 billion, which was a 5% increase from the year before. Its earnings per share (EPS) hit US$0.76, a 36% increase compared to the same time in 2022. Its operating margin also increased to 6%, with its different segments performing well.

Overall, it was a strong quarter — one that analysts believe demonstrates that there is even more growth to come, especially with Nvidia stock doing so well.

What’s with Nvidia?

Nvidia stock creates graphics processing units (GPU). If you operate something digital, it uses these GPUs. But before they can go on the market, companies such as Celestica stock need to test them. Hence the huge interest in the stock as of late.

But it’s not the only thing it does. There are multiple electric manufacturing components that the stock tests out. And this is another reason why the company is of interest. Even should Nvidia stock drop, Celestica stock should continue to do well. This is why analysts believe it could be undervalued.

Strong buy

Celestica stock is seen as a strong buy from analysts these days. In fact, they continue to increase their consensus price targets for the tech stock, especially after strong earnings after strong earnings.

That future earnings potential comes from a strong future for both the stock and the sector. Revenue growth has remained stable, and the company believes this will continue throughout 2024. Furthermore, there are ongoing opportunities in both aerospace and defence as well as specialty technologies.

Furthermore, the company has been improving profitability, making strategic investments, and creating value for shareholders. As for the sector, technological advancements such as artificial intelligence (AI) will only be a benefit to the tech stock. That new focus will need to be tested, making Celestica stock a huge benefactor.

Bottom line

While there is competition, Celestica stock remains a top choice as we see more focus on these types of testing tech stocks. So, if you’re looking for growth, I wouldn’t say that even 220% is the end of the story of Celestica stock. We could see this happen again, especially in a bull market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.

More on Tech Stocks

falling red arrow and lifting
Tech Stocks

Is Shopify a Buy, Sell, or Hold?

Shopify (TSX:SHOP) stock has been pulling back of late, opening up a window for dip buyers.

Read more »

Different industries to invest in
Tech Stocks

2 No-Brainer Growth Stocks to Buy Now With $2,000 and Hold Long Term

These growth stocks have already proven their worth this year, but are solid investments for long-term holders as well.

Read more »

woman data analyze
Tech Stocks

1 Stock That’s Just as Hot as Nvidia (Without All the Hype)

Nvidia (NASDAQ:NVDA) stock has surged in share price, but so has this stock, with a far lower share price to…

Read more »

Index funds
Tech Stocks

Constellation Software Stock: Buy, Sell, or Hold?

Unveiling the Code: Should you Buy, Hold, or Sell Constellation Software (TSX:CSU) stock at current levels?

Read more »

A plant grows from coins.
Tech Stocks

Got $5,000? These Are 2 of the Best Growth Stocks to Buy Right Now

Growth investors should have these two tech stocks high up on their watch lists.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Tech Stocks

Well Health Stock Is Down 58% From its Highs – Time to Buy?

Well Health stock has been hit, but the company remains on a path of record-breaking revenues as it approaches positive…

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

TFSA: The Most Expensive Stock in Canada Is a Top Buy Today

CSU stock (TSX:CSU) may be the priciest stock on the TSX today, but there is a very good reason for…

Read more »

TFSA and coins
Dividend Stocks

TFSA: Invest $15,000 in CSU Stock and Get $4,694 in Passive Income

CSU stock (TSX:CSU) has surged in the last year, yet even if growth slows by half, you could create immense…

Read more »