Celestica (CLS) & Eltek (ELTK) Critical Review

Celestica (NYSE:CLS) and Eltek (NASDAQ:ELTK) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

65.5% of Celestica shares are owned by institutional investors. Comparatively, 2.5% of Eltek shares are owned by institutional investors. 1.0% of Celestica shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Celestica and Eltek’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Celestica $6.11 billion 0.25 $105.00 million $0.72 14.97
Eltek $32.75 million 0.18 -$3.77 million N/A N/A

Celestica has higher revenue and earnings than Eltek.

Profitability

This table compares Celestica and Eltek’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Celestica 0.82% 4.03% 1.71%
Eltek -9.85% -112.37% -15.45%

Risk and Volatility

Celestica has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Eltek has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Celestica and Eltek, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Celestica 0 4 3 0 2.43
Eltek 0 0 0 0 N/A

Celestica currently has a consensus price target of $12.40, indicating a potential upside of 15.03%. Given Celestica’s higher possible upside, equities analysts plainly believe Celestica is more favorable than Eltek.

Summary

Celestica beats Eltek on 11 of the 11 factors compared between the two stocks.

About Celestica

Celestica Inc. provides design, manufacturing, hardware platform, and supply chain solutions in Canada and internationally. The company offers a range of services, including design and development, engineering, supply chain management, new product introduction, component sourcing, electronics manufacturing, assembly and test, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, and after-market repair and return services. Its products and services are used in various applications, such as servers, networking and telecommunications equipment, storage systems, converged systems, optical equipment, aerospace and defense electronics, healthcare products and applications, semiconductor equipment, and industrial and alternative energy products. The company serves customers in the aerospace and defense, industrial, smart energy, healthcare, semiconductor equipment, consumer, communications, and enterprise end markets. Celestica Inc. was incorporated in 1996 and is headquartered in Toronto, Canada.

About Eltek

Eltek Ltd. manufactures, markets, and sells printed circuit boards (PCBs) in Israel, Europe, North America, India, and internationally. The company offers a range of custom designed PCBs, including rigid, double-sided, and multi-layer PCBs; and flexible circuitry, such as flex and flex rigid boards. It serves manufacturers of defense and aerospace, medical, industrial, telecom, and networking equipment, as well as contract electronic manufacturers and other industries. The company markets and sells its products primarily through direct sales personnel, sales representatives, and PCB trading and manufacturing companies. Eltek Ltd. was founded in 1970 and is headquartered in Petach Tikva, Israel. Eltek Ltd. is a subsidiary of Nistec Ltd.

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