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While current supply chain disruptions, rising inflation, and the potential tightening of monetary policy in the near term remain concerns, the key factor driving the market higher is strong corporate earnings. According to a FactSet report, combining already reported results and estimates, the net profit margin for the S&P 500 members for the third quarter is 12.3%, which exceeds the 10.9% five-year average net profit margin.
Given this backdrop, we think if one has $2,000 in disposable cash, one should consider investing in Extreme Networks, Inc. (EXTR) and Universal Electronics Inc. (UEIC). These stocks possess strong growth attributes and are expected to continue gaining. They also possess a ‘Strong Buy’ rating in our proprietary POWR Ratings system.
