Q: Hi - would love your thoughts on why CLS is falling faster than its peers of late. Would you suggest continuing to hold (if long) or buy if not owned? How concerned are you about upcoming EPS release? Many thanks as always.
5i Research Answer:
Many times, in a correction, the stocks with the biggest gains often take the biggest hits. It is much easier for some investors to sell a stock up 65% than to sell a stock up fractionally, or down. Most tech or related stocks have had a very tough April, but CLS has had no specific material news. It ran pretty hard on its AI potential, and AI stocks fell out of bed last week. It is only 14X earnings, with a very strong balance sheet and good earnings growth, so we do think it is a keeper. We have no specific reason to be concerned about the Q1, though investors do seem to be a selling mood these days. But, for now, we would see this as a normal market correction and not a time for panic.