Celestica Inc (NYSE:CLS) Passes Key CAN SLIM Investment Screen

For investors looking for a systematic way to find high-growth market leaders, the CAN SLIM method, created by William O'Neil, provides a disciplined structure. This approach mixes detailed fundamental study with important technical signs to find stocks with solid earnings momentum, institutional support, and leading traits. The aim is to locate companies at the beginning of a major growth phase, just as the wider market starts to notice them. A recent filter using this method has identified Celestica Inc (NYSE:CLS) as a possible name for more detailed study.

Meeting the CAN SLIM Criteria

The CAN SLIM acronym lists seven key filters. Here is how Celestica measures against the main quantitative rules:

• C - Current Quarterly Earnings & Sales: The system requires solid recent momentum. Celestica shows quarterly earnings-per-share (EPS) growth of 51.9% and sales growth of 27.8% against the same quarter last year, easily passing the usual minimum levels of 20-25%. This speed increase is a central part of the CAN SLIM method, indicating a company that is not only growing, but doing so faster.

• A - Annual Earnings Increases: To confirm durability beyond one quarter, CAN SLIM requires a record of strong yearly growth. Celestica’s three-year EPS compound annual growth rate (CAGR) is a notable 44.1%, greatly exceeding the 25% standard. Also, its Return on Equity (ROE) of 35.3% shows very efficient use of shareholder money, a main profit measure stressed by O’Neil.

• S - Supply and Demand: This rule involves checking financial condition and share structure. Celestica holds a careful Debt-to-Equity ratio of 0.37, much lower than the filter’s maximum of 2, pointing to a manageable debt level that does not over-burden the company’s finances.

• L - Leader or Laggard: Relative strength is an essential technical part of CAN SLIM, finding stocks that are doing better than the wider market. With a relative strength score of 98.4, Celestica is performing better than almost all other stocks, clearly putting it in the "leader" group. This matches the idea of buying stocks that are already wanted.

• I - Institutional Sponsorship: While institutional ownership shows professional attention, it should not be so large that all buying is finished. Celestica’s institutional ownership of 73.7% is under the 85% limit, showing potential for more institutional buying, which can give continued upward pressure.

Fundamental and Technical Condition

Beyond the specific filter rules, a wider view of Celestica’s reports shows a company in a strong upward trend with good core fundamentals.

The company’s fundamental analysis report gives it a score of 7 out of 10, noting outstanding profit measures like ROE and Return on Invested Capital (ROIC) that are in the top group of its industry. Growth is the prominent feature, with a "9" score driven by large past EPS growth and solid analyst forecasts for future increase. While the stock’s valuation measures seem high on a normal P/E basis, the report states this could be reasonable given its exceptional growth and profit profile.

Technically, the stock also gets a score of 7, as explained in its technical analysis report. The long-term trend is still positive, and the stock is trading in the higher part of its 52-week range, fitting with the CAN SLIM liking for stocks reaching or approaching new highs. The report mentions a recent period of sideways movement with clear support levels, which can provide planned entry chances for investors who follow the method’s rules on price patterns and exact buying.

A Candidate for Further Review

Celestica Inc presents a strong example of a stock that meets a strict, multi-part CAN SLIM filter. It shows the effective mix of speeding fundamental growth, better market-leading relative strength, and sound institutional sponsorship that the approach looks for. The company’s solid role in providing supply chain solutions for advanced technology and cloud infrastructure fits the "N" rule of being part of newer, significant market movements.

For investors using this method, Celestica is a name that justifies more detailed investigation, especially about its price charts for a correct entry and considering the general market trend, the final "M" in CAN SLIM. With the S&P 500's short-term trend currently positive, the overall market condition may be supportive for such leading stocks.

Find other stocks that currently meet the CAN SLIM filter rules by viewing the pre-set filter here.

Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer to buy or sell any security. The CAN SLIM method involves risk, including loss of principal. Investors should do their own complete research and think about their personal financial situation before making any investment choices. Past results do not guarantee future outcomes.