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Workers assemble components at a Celestica factory in the southern China city of Dongguan.

Vincent Yu

Thinking about getting yourself a piece of Research In Motion's action, but that $60-a-share price tag has you hesitating?

Then why not try Celestica Inc. ($9 and change) on for size.

In a research note Monday, Scotia Capital analyst Gus Papageorgiou noted that Celestica "offers the best exposire to RIM" of any of the key electronics manufacturing companies that produce products on behalf of the BlackBerry giant. Its contracts with RIM accounted for 17 per cent of Celestica's revenues in 2009, and Mr. Papageorgiou estimated that this share has increased to 19 per cent for 2010.

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What's more, Celestica's business with RIM is set to surge, as the company's operations in Romania ramp up its BlackBerry production and the handsets make increasing inroads in the Asian market.

"Celestica is likely to see business with RIM grow by 25 per cent to 50 per cent in 2011," Mr. Papageorgiou projected.

He said that if the growth from RIM comes in at the top end of this range, it would mean an additional 2 cents a share to his Celestica 2011 profit forecast of $1 a share.

Of course, you could just buy RIM to tap into RIM's upside, rather than get a tiny piece of it by buying Celestica. But keep in mind that RIM's stock is up more than 30 per cent in the past two months, while Celestica is up just 10 per cent. It looks like Celestica investors haven't yet caught up with the growth potential that RIM investors have already recognized - and that might mean more upside potential for Celestica.

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About the Author
Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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