The upbeat corporate earnings are driving the uptrend in benchmark equity indexes. And since the market is expected to continue moving higher, we think low-priced stocks Telefónica (TEF) and Crescent Point (CPG) could be solid bets now, given their fundamental strength. So, let’s discuss these names.Despite worries surrounding rising inflation, the Fed’s signal that it will tighten monetary policy, and surging COVID-19 cases, investor optimism is evident in the recent performances of the major stock market indexes. On October 20, the index reached a record high of 35,669.69. And the S&P 500 delivered a six-day winning streak, approaching a record on Oct 20. To reach 4,536.19 the index gained 16.56 point, less than 0.2% from its previous record. Chief investment strategist at CFRA, Sam Stovall, expects the S&P 500 to hit a new record high.
One of the prime factors driving the market’s rally is impressive third-quarter earnings reports from S&P 500 companies. According to a FactSet report, the net profit margin for the S&P 500 member companies for the third quarter of 2021 is 12.3% (combining the numbers reported so far and the estimates), which compares to a 10.9% five-year average net profit margin. Analysts anticipate that the third-quarter earnings will rise 35% year over year.
Given the market’s uptrend, we think that quality stocks Telefónica, S.A. (TEF), and Crescent Point Energy Corp. (NYSE:), which are currently trading at less than $10, could be good additions to one’s portfolio now.
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