The TSX30 is out, and there are two Canadian companies that investors have likely already noticed before the TSX today. Those are Celestica (TSX: CLS) and Hammond Power Solutions (TSX: HPS.A), and it’s clear why. Over the last few years, both of these Canadian companies have absolutely surged in share price, not just this year. In fact, shares of Celestica are up about 3,500% in the last five years alone, and Hammond’s are up almost 2,000%! These multibaggers then aren’t just this year’s must-have stocks, but the next decade‘s. Let’s get into why.
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CLS
First, let’s look at what’s been happening lately to cause CLS to surge so far in share price. The company focuses on creating the necessary hardware behind some of the world’s fastest-expanding industries — namely, artificial intelligence, which involves data storage. This has led to large institutional investment and strong momentum flows to create powerful price moves.
Some of those moves have come from the absolutely stellar earnings. Most recently, the second-quarter results came in with strong revenue, up 21% year over year and adjusted earnings per share (EPS), up a whopping 54% year over year. Both were above guidance ranges. This caused management to actually increase its 2025 revenue outlook to $11.55 billion from $10.85 billion, as well as its adjusted EPS and free cash flow targets.
What investors interested in getting in on this TSX stock will want to watch then will be whether the TSX stock can keep rising. Celestica will need to continue seeing revenue growth, and whether third-quarter bookings and backlog will rise as well. Furthermore, shareholders will want to see that FCF is put to work, ideally through buybacks. Then, of course, there’s macro risks such as tariffs and supply chain disruptions. Yet, if the past is any indicator, this shouldn’t be a problem.
HPS
Next, we have Hammond Power, another essential power stock that’s been surging on the TSX today. The company makes dry-type transformers, power-quality products, and magnetics. These are types of equipment that are in demand for grid modernization, specifically when it comes to renewable, electric vehicle charging, industrial electrification, and, yes, data power distribution. So, as with Celestica, it’s in a prime position.
This, too, was seen during recent earnings, with Hammond reporting record sales that surged 14% year over year, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) up to $33 million. Its gross margin now sits at 30.7 %, solid for an industrial manufacturer. Furthermore, its backlog remains healthy, with a new Mexico production facility complete and starting to make shipments.
For Hammond, investors will want to watch that backlog rise, as this will quickly convert to revenue. What’s more, the Mexico facility will want to be ramped up now that it’s complete to create more free cash flow. Yet as well, investors will want to see the cash on hand rise, as it’s only about $28 million as of writing. And as with Celestica, tariffs and trade risks do remain.
Bottom line
Both Celestica and Hammond Power stock are two TSX stocks that might look trendy, but are incredible investments on the TSX today. These two have tailwinds behind them that aren’t weakening, but gaining strength. While it’s unlikely that investors will see another surge in share price by 3,500% or 2,000%, they could still be in for more sustained growth. So, if you’re an investor with a longer timeframe, then these two look like strong stocks only getting stronger.
