Rebounding investor interest in the technology industry due to rising demand for technology solutions with the resurgence of COVID-19 cases in several countries and the ongoing digital transformation should help tech stocks deliver solid returns in the coming months. However, because current market volatility might cause high-priced tech stocks to suffer a correction in the near term, we think it could be wise to bet on low-priced stocks whose companies are equipped to cash in on the industry tailwinds. Lantronix (NASDAQ:LTRX), NetSol (NTWK), and Evolving Systems (EVOL) are currently trading below $5 in price but have been rated B (Buy) by our proprietary rating system. So, let’s pore over these names.The ongoing digital transformation and a continuation of remote working partly because of a resurgence of COVID-19 cases are rekindling investor interest in the tech industry. This is evidenced by the iShares U.S. Technology ETF’s (IYW) 4% returns versus SPDR S&P 500 Trust ETF’s (SPY) 2.9% gains over the past month.
However, because concerns over rising inflation, a slowing global economic recovery, and geopolitical tensions are fostering volatility in the stock market, many quality tech stocks, which are currently trading at high prices, could witness a correction in the near term.
So, we think it could be wise to bet on low-priced tech stocks Lantronix, Inc. (LTRX), NetSol Technologies, Inc. (NTWK), and Evolving Systems, Inc. (EVOL) that have the financial wherewithal to cash in on the industry tailwinds. Each of these stocks is rated B (Buy) in our proprietary POWR Ratings system.