Excitement on Bay Street: Why Celestica and MDA Stocks Are Thriving - Kalkine Media

November 07, 2023 05:27 AM EST | By Team Kalkine Media
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As market volatility continues to cast a shadow of uncertainty, Canadian stocks are defying the headwinds in 2023 and grabbing the spotlight on Bay Street. Two TSX technology stocks, Celestica (TSX:CLS) and MDA (TSX:MDA), are capturing the attention of investors with impressive year-to-date returns, offering a ray of hope in these challenging times. 

Celestica's Impressive Performance 

Celestica, a leading provider of high-reliability design, manufacturing, and supply chain solutions, is enjoying a remarkable year. The TSX CLS has surged by 119.27% year to date, outperforming many other tech stocks in the market. 

The company's recent Q3 2023 earnings release further bolstered its appeal. In the third quarter, Celestica reported a 6% increase in revenue, reaching $2.04 billion compared to the same period in 2022. The net earnings also saw a substantial 75.5% year-over-year growth, amounting to $80.2 billion. 

Rob Mionis, the President and CEO of Celestica, expressed confidence in the company's performance, stating that their solid Q3 results and year-to-date performance have set them on course to surpass their 2023 annual financial outlook. 

Additional financial highlights included a remarkable year-over-year increase in adjusted free cash flow, soaring by 360.8% to $34.1 million. Cash provided by operations also demonstrated healthy growth, rising by 18.8% to $88.4 million. 

Mionis highlighted that Celestica's revenue is derived from two operating segments. The Advanced Technology Solutions (ATS) segment caters to various sectors, including Aerospace and Defense (A&D), Industrial, Health Tech, and Capital Equipment. 

According to Mionis, the industrial business in the ATS segment is experiencing strong growth, driven by new "green" programs, with the momentum expected to continue into 2024. 

The Connectivity & Cloud Solutions (CCS) segment serves clients in the Communications and Enterprise end markets, particularly hyperscaler clients. The strong business mix in this segment is contributing to its growth. 

With a stock price of $33.46 per share, Celestica has demonstrated an impressive gain of more than 330% over the last three years. 

MDA's Space Technology Triumph 

MDA, a company based in Brampton with a market capitalization of $1.4 billion, is making headlines in the expanding global space industry. TSX MDA specializes in geo-intelligence, robotics, space operations, and satellite systems, and it continues to thrive in a challenging environment. 

The company reported a 34.2% year-over-year increase in revenue during the first half of 2023, reaching $397.9 million. Net income also witnessed a substantial growth, reaching $26 million, compared to a net loss of $400,000 during the same period in 2022. 

MDA's CEO, Mike Greenley, expressed the company's strong position to capitalize on robust market activity and growing customer demand. 

One of MDA's notable projects is CHORUS, a next-generation satellite constellation for Earth observation, set to launch in Q4 2025. The company has chosen SpaceX, led by Elon Musk, as the launch service provider for this ambitious project. 

With a current share price of $11.79, investors have a promising opportunity to consider MDA's stock as they aim for potential multi-bagger returns. 

Conclusion 

Celestica and MDA are shining examples of companies that are thriving despite the market's challenges. Whether you choose to invest in the innovative supply chain solutions provider or the space technology developer, both stocks offer the potential for significant returns in the future. 


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