Many are blaming the rise in inflation on large deficits and the Fed's easy money policy. However, this doesn't seem right given that we have had minimal inflation over the last decade, while the Fed has been dovish and deficits have trended higher.
Instead, the culprit is supply chains were engineered for a Just-In-Time inventory system which came under stress due to the pandemic. The supply chain issues are also affecting businesses in addition to everyday people, and most don't expect it to get fully sorted out till next year assuming the pandemic doesn't flare up again.
Below, we provide a look at two affordable supply chain management stocks every investor should consider. Those stocks are Celestica (CLS) and Wipro Limited (WIT).
CLS
CLS is one of the top electronics manufacturing businesses on the planet. CLS’s manufacturing tech and solutions are used by companies throughout the communication sector as well as the computing space. CLS also provides post-manufacturing support to some of the leading original equipment manufacturers in the world.
CLS is trading at $9.25. The stock's 52-week high is $9.57. CLS has a 52-week low of $5.77. The stock has anticipated earnings per share growth rate of more than 10% in the next half-decade. CLS earnings across the prior four quarters are averaging 15.5% better than expectations.
CLS has a B POWR Rating grade, meaning it is a Buy. The stock has an A grade in the Value component of the POWR Ratings along with a B Sentiment component grade. However, CLS has C grades in the Stability and Momentum components. Investors are encouraged to click here to find out more about how CLS fares in the rest of the POWR Ratings components such as Quality and Growth.
CLS is ranked 13th of the 74 stocks in its Technology - Services category. You can learn more about the stocks in this space by clicking here.
The analysts have established an average target price of $9.75 for CLS. An increase to this level represents nearly a 5% climb in value. In the prior 13 months, the stock's average analyst price target has increased by $1.03. The stock's average upside potential across the prior 16 months has averaged nearly 14%.
CLS has a high beta of 2.41. This figure indicates CLS is likely to make significant moves if the market as a whole becomes volatile. However, CLS has a forward P/E ratio of 8.06, meaning it is undervalued, so don't let the high beta scare you away. Even those who gravitate toward low-beta stocks must acknowledge the fact that institutional investors and retail investors are more than willing than ever to overlook a high beta if the stock in question has merits that counterbalance its potentially excessive valuation.
WIT
WIT provides IT solutions and services ranging from software application development to systems integration, package implementation, and development services for corporations.
WIT is currently trading at $9.66. The stock's 52-week high is $9.80. WIT has a 52-week low of $4.26.
WIT has a B POWR Rating grade. The stock has an A Stability component grade along with Bs in the Quality, Momentum, and Sentiment components. Click here to find out how WIT fares in the remainder of the POWR Rating components such as Value and Growth.
Of the dozen publicly traded companies in the Outsourcing - Tech Services space, WIT is ranked fifth. Investors can find out more about the stocks in this segment by clicking here.
WIT's forward P/E ratio is 33.39, meaning it is trading a bit higher about its earnings than most investors desire. However, WIT is a tech services stock within the supply chain management space so the comparably high forward P/E ratio is somewhat excusable.
WIT shares were trading at $9.45 per share on Thursday morning, up to $0.04 (+0.43%). Year-to-date, WIT has gained 67.56%, versus a 21.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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