The benchmark equity indexes are extending their uptrend thanks primarily to upbeat corporate earnings. 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. The Dow Jones Industrial Average rose to a new record on October 20, touching its 35,669.69 all-time high. And the S&P 500 delivered a six-day winning streak, approaching a record on Oct 20. The index gained 16.56 points to hit 4,536.19, which was less than 0.2% short of its record high. 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 expect third-quarter earnings to jump 35% year-over-year.
Given the market’s uptrend, we think that quality stocks Telefónica, S.A. (TEF), and Crescent Point Energy Corp. (NYSE:CPG), which are currently trading at less than $10, could be good additions to one’s portfolio now.