Celestica Inc (NYSE:CLS) Stands Out as a Strong CAN SLIM Candidate

The CAN SLIM investment methodology, created by William O'Neil, joins fundamental and technical analysis to find high-growth market leaders. This methodical process assesses companies using seven main factors represented by the letters CAN SLIM, concentrating on earnings speed, yearly growth patterns, new products or services, supply and demand forces, leading market position, institutional investment, and the general market trend. The method looks for companies with good fundamental condition while also displaying technical momentum.

Current Quarterly Performance

Celestica Inc (NYSE:CLS) shows very good recent quarterly performance that fits well with the "C" part in CAN SLIM, which highlights current quarterly earnings and sales speed. The company's newest financial outcomes show:

• Quarterly EPS growth of 51.9% compared to the same quarter last year
• Quarterly revenue growth of 27.8% year-over-year

These numbers are well above the CAN SLIM minimums of 20-25% growth, pointing to good operational momentum. The earnings growth speed is especially notable as it goes beyond the system's need for not just growth, but increasing growth rates.

Annual Earnings Growth

The "A" in CAN SLIM looks at yearly earnings gains, and Celestica performs very well here. The company has reached:

• Three-year EPS compound annual growth rate of 44.1%
• Return on Equity of 30.6%, much higher than the 10% minimum needed

This steady yearly growth shows the company's capacity to maintain profit gains over several years, not just in single quarters. The high ROE points to efficient use of shareholder money, another important factor in the CAN SLIM method.

Financial Health and Supply Dynamics

Celestica's financial numbers meet several CAN SLIM factors at the same time, especially concerning the "S" (supply and demand) and general financial condition:

• Debt-to-equity ratio of 0.48, much lower than the maximum of 2.0
• Institutional ownership of 75.9%, under the 85% limit that could point to limited potential
• Good fundamental health score of 7/10 with very good profitability grades

The reasonable debt level gives financial room without high leverage risk, while the institutional ownership level indicates space for more institutional buying, possibly pushing future price gains.

Market Leadership and Technical Strength

The "L" factor in CAN SLIM highlights market leadership, and Celestica's technical performance confirms its strong status:

• Relative strength of 98.5, showing it performs better than 98.5% of all stocks
• Ideal technical grade of 10/10 with both short and long-term trends positive
• 364.9% price gain over the past twelve months
• Trading near 52-week highs with good volume support

This very good relative performance shows that the market sees Celestica's fundamental qualities, a key confirmation in the CAN SLIM method that joins fundamental quality with technical momentum.

Growth Trajectory and Valuation

While Celestica meets most CAN SLIM factors very well, investors should be aware of the valuation situation:

• Forward P/E ratio of 49.3, higher than market averages
• Good expected EPS growth of 36.7% each year
• Estimated revenue growth of 24.3% per year

The high valuation is backed by very good growth forecasts, though it needs belief in the company's ability to meet these estimates. The detailed fundamental analysis shows very good growth and profitability scores balanced by high valuation multiples.

Investment Considerations

From a technical view, the technical analysis report indicates Celestica is stretched after its large rise, suggesting that waiting for a pause might give better entry chances. The stock's large momentum is clear, but careful position size and stop-loss use fit with CAN SLIM's structured risk control rules.

The mix of Celestica's good quarterly speed, impressive yearly growth patterns, acceptable debt levels, institutional investment balance, and market-leading relative strength makes it an interesting candidate for CAN SLIM investors. The company's place in supply chain solutions for technology areas provides the new features wanted by the method.

For investors wanting to find other companies that fit CAN SLIM factors, the screening tool gives continuous screening results based on these settings.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions. Past performance does not guarantee future results.