Most people shouldn't go anywhere near those stocks. If a company meets a demand, you need to decide whether that demand is likely to continue. The graveyard of failed technology is filled with ideas that never took off. The Apple Newton was so unreliable in reproducing handwriting on its tiny screen, the device was mocked in Doonesbury comics. If a company is going to have staying power, a long-lasting trend or development must fuel that exponential growth in revenue and earnings you are hoping to see.
Analysts see several trends that suggest it can.
Many computer and electronics heavyweights will likely try to reduce the number of contract manufacturers with which they do business, for example. As one of the top-tier companies in its industry, Celestica will be well placed to increase its business with these existing customers. At the same time, industries such as telecommunications have been moving increasingly toward outsourcing with many multiyear, multibillion-dollar agreements. Analysts say Celestica has the high-end, complex manufacturing capabilities that will enable it to win more than its fair share of the business. Mr. Bart suggests also looking for the big-picture.