With inflation climbing 7.5% in the 12 months to January, you might be wondering which stocks could benefit.
The last 12 months have been a good period for stocks that benefit from inflation, according to Credit Suisse.
“Over the past year, inflation-sensitive stocks have outperformed their benchmarks,” Credit Suisse analysts, led by Patrick Palfrey, wrote in a commentary.
For large caps, the outperformance ranged from 25% for inflation beneficiaries to 14% for the S&P 500. Inflation beneficiaries make up the top third of the index.
“In addition, more inflation-sensitive stocks are trading at a lower price than the rest of the market,” Credit Suisse said.
He offered a list of top stocks filtered out for inflation beneficiaries for various market indices. Credit Suisse began by calculating each stock’s response to daily changes in inflation thresholds.
This is equivalent to calculating the average daily return of the stock on days when inflation rises and days when inflation falls over the past 12 months.
The company’s inflation sensitivity score is the difference between the return on up days minus down days.
Top 50 beneficiaries of inflation in the S&P 500 include Exxon Mobil (XOM) – Get Exxon Mobil Corporation reportSchlumberg (SLB) – Get Schlumberger NV report Dow (DOW) – Get the report from Dow, Inc.Las Vegas Sands (LVS) – Get the report from Las Vegas Sands Corp.Etsy (ETSY) – Get the report from Etsy, Inc.Norwegian Cruise Line (NCLH) – Get the report from Norwegian Cruise Line Holdings Ltd.under protection (UAA) – Get Under Armour, Inc. Class A ReportState Street (STT) – Get the report from State Street CorporationCapital One Financial (COF) – Get Capital One financial company report and SolarEdge technologies (SEDG) – Get the report from SolarEdge Technologies, Inc.. The list is heavy on energy and financial companies.
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