With inflation soaring 7.5% for the 12 months through January, you might be wondering which stocks might benefit.
The last 12 months have been a good time for stocks that benefit from inflation, according to Credit Suisse.
“Over the past year, inflation sensitive stocks have delivered superior returns relative to their benchmarks,” Credit Suisse analysts, led by Patrick Palfrey, wrote in a commentary.
For large cap stocks, the outperformance was 25% for inflation beneficiaries to 14% for the S&P 500. The inflation beneficiaries represent the top third of the index.
“In addition, more inflation sensitive stocks trade at a discount to the rest of the market,” Credit Suisse said.
Under Armour
It offered a list of the top stocks as filtered for inflation beneficiaries for various market indices. Credit Suisse started by calculating each stock’s response to daily changes in inflation break-even levels.
That amounts to calculating the stock’s average daily return on days when inflation rises and on days when inflation falls over the trailing 12 months.
The company’s inflation sensitivity score represents the difference between the return on up days minus down days.
The top 50 inflation beneficiaries in the S&P 500 include Exxon Mobil (XOM), Schlumberger (SLB) Dow (DOW), Las Vegas Sands (LVS), Etsy (ETSY), Norwegian Cruise Line (NCLH), Under Armour (UAA), State Street (STT), Capital One Financial (COF) and SolarEdge Technologies (SEDG). The list is heavy on energy and financial companies.
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