Dj Officer Running Registers 579 Of Plexus Corp >Plxs

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth Score

Growth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum Score

Momentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM Score

If you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +25.41% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Plexus (PLXS)

Founded in 1979, Neenah, WI. -based Plexus Corp. is a leading provider of electronic contract manufacturing services to original equipment manufacturers (OEMs) in a wide range of industries, including Healthcare/Life Sciences, Industrial and Aerospace/Defense market sectors.

PLXS is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. PLXS has a Growth Style Score of B, forecasting year-over-year earnings growth of 18.7% for the current fiscal year.

Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.59 to $6.79 per share. PLXS boasts an average earnings surprise of 10.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, PLXS should be on investors' short list.

Zacks Investment Research

Shares of Celestica (CLS) have been strong performers lately, with the stock up 36.1% over the past month. The stock hit a new 52-week high of $86.36 in the previous session. Celestica has gained 193.2% since the start of the year compared to the 31.4% move for the Zacks Computer and Technology sector and the 43.3% return for the Zacks Electronics - Manufacturing Services industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 23, 2024, Celestica reported EPS of $1.04 versus consensus estimate of $0.94 while it beat the consensus revenue estimate by 3.66%.

For the current fiscal year, Celestica is expected to post earnings of $3.85 per share on $9.6 billion in revenues. This represents a 58.44% change in EPS on a 20.55% change in revenues. For the next fiscal year, the company is expected to earn $4.43 per share on $10.42 billion in revenues. This represents a year-over-year change of 15.32% and 8.52%, respectively.

Valuation Metrics

Celestica may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Celestica has a Value Score of B. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 22.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 19X. On a trailing cash flow basis, the stock currently trades at 22.6X versus its peer group's average of 15.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Celestica currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Celestica fits the bill. Thus, it seems as though Celestica shares could still be poised for more gains ahead.

How Does CLS Stack Up to the Competition?

Shares of CLS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Plexus Corp. (PLXS). PLXS has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.

Earnings were strong last quarter. Plexus Corp. beat our consensus estimate by 20.92%, and for the current fiscal year, PLXS is expected to post earnings of $6.81 per share on revenue of $4.23 billion.

Shares of Plexus Corp. have gained 21.2% over the past month, and currently trade at a forward P/E of 24.37X and a P/CF of 19.82X.

The Electronics - Manufacturing Services industry is in the top 5% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CLS and PLXS, even beyond their own solid fundamental situation.

Zacks Investment Research