In this article, we discuss the 5 best stocks for inflation according to Redditors. If you want to read our analysis of the overall consumer sentiment, go directly to 10 Best Stocks For Inflation According to Redditors.
5. The Mosaic Company (NYSE:MOS)
Number of Hedge Fund Holders: 66
The Mosaic Company (NYSE:MOS) is a Tampa, Florida-based miner and processor of phosphate and potash minerals into fertilizer.
On July 14, John Roberts at Credit Suisse initiated coverage on The Mosaic Company (NYSE:MOS) stock with an Outperform rating and a target price of $60. The analyst highlighted the low exposure of The Mosaic Company (NYSE:MOS) in the hydrocarbon-based nitrogen market as a positive. The company is expected to generate nearly 40% of its estimated EBITDA for 2022 through the sale of phosphate. Furthermore, The Mosaic Company’s (NYSE:MOS) exposure in Brazil is also beneficial because the country has the fastest growing fertilizer market and contributes more than 50% to the top line of The Mosaic Company (NYSE:MOS).
In its Q1 2022 investor letter, Carillon Tower Advisers discussed its stance on The Mosaic Company (NYSE:MOS). Here’s what the firm said:
“Despite a rally near the end of the quarter, major equity indexes closed lower as fear of U.S. Federal Reserve (FED) balance sheet tapering, interest rate hikes, and war in the Ukraine sent the bulls into retreat. Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Potash and phosphate fertilizer producer Mosaic (NYSE:MOS) performed strongly as war exacerbated already short supplies of key oil and gas exploration.”
Overall, 66 hedge funds held a stake in The Mosaic Company (NYSE:MOS) as of Q1 2022.
4. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 69
Verizon Communications Inc. (NYSE:VZ) is a New York-based provider of internet, TV, and wireless network services.
Verizon Communications Inc. (NYSE:VZ) has received a $400 million contract from the FBI to improve the agency’s bandwidth globally to meet the ever-increasing data needs. Verizon Communications Inc. (NYSE:VZ) offers a healthy yield of over 5% during these inflationary times and is currently trading at its lowest P/E multiple in the last two decades. The blue-chip stock was given a target price of $58 with a Hold rating by Deutsche Bank on July 19.
Although the S&P 500 Index and the tech-heavy NASDAQ Composite Index have experienced a decline of 17% and 25%, respectively, since the start of the year, Verizon Communications Inc. (NYSE:VZ) has been nearly flat as it has lost only 3% of its value during the same period.
Here’s what ClearBridge Investments said about Verizon Communications Inc. (NYSE:VZ) in its Q4 2021 investor letter:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like telecom (Verizon). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 83
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a Santa Clara, California-based semiconductor company.
On July 19, Aaron Rakers at Wells Fargo gave Advanced Micro Devices, Inc. (NASDAQ:AMD) stock a target price of $130 with an Overweight rating. The analyst showed confidence in the company’s roadmap and its ability to continuously gain market share following the Analyst Day in early June. Rakers thinks that Advanced Micro Devices, Inc. (NASDAQ:AMD) stock can trade at a forward P/E multiple of more than 25x due to its market gain narrative. Presently, the shares are trading at a forward multiple of 18.7x. The US government is also working on injecting $52 billion into the semiconductor industry to boost overall production.
Advanced Micro Devices, Inc. (NASDAQ:AMD) was mentioned in the Q4 2021 investor letter of Carillon Tower Advisers. Here’s what was said about the company:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
The number of hedge funds having a stake in Advanced Micro Devices, Inc. (NASDAQ:AMD) increased from 69 in the first quarter of 2022 to 83 funds at the end of Q2 2022.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Apple Inc. (NASDAQ:AAPL) is a Cupertino, California-based tech giant that excels in consumer electronics, online services, and software.
In an investor note released on July 19, Dan Ives at Wedbush highlighted that Apple Inc.’s (NASDAQ:AAPL) key numbers for Q2 2022 look achievable. The analyst added that the demand for iPhone is showing resilience despite the numerous supply chain-related challenges impacting Apple Inc. (NASDAQ:AAPL) and other tech companies. As a result, Ives thinks that the investors are looking past the company’s Q2 2022 results and focusing on the results for Q3 and Q4 as the iPhone 14 production and sale will be in full force by then. Apple Inc. (NASDAQ:AAPL) is working aggressively on broadening its product and services pipeline in the coming quarters. Ives has given Apple Inc. (NASDAQ:AAPL) a target price of $200 with an Outperform rating.
Weitz Investment Management shared its outlook on Apple Inc. (NASDAQ:AAPL) in its Q1 2022 investor letter. Here’s what the investment management firm said:
“Changes to Apple’s (NASDAQ:AAPL) mobile operating system have temporarily impacted growth of Meta’s advertising business just as the company’s investments in Instagram’s “Reels” feature ramp ahead of full monetization. (Shareholders can read research analyst Jon Baker’s in-depth discussion of current events impacting Meta and reasons why we’re optimistic about the company in our recent Analyst Corner feature.) CoreCard (formerly Intelligent Systems) struggled early in the fiscal year to hire and train staff to handle growth from new and existing clients. Lately, Apple-related headlines also took a bite out of CoreCard shares, as reports suggest Apple is exploring a transition of its credit card and other financial services to internally built solutions. Such a move would create revenue headwinds for its partners, which CoreCard is widely believed to be. We are monitoring these developments and stress-testing our model accordingly.”
Beech Hill Partners held a stake worth over $9 million in Apple Inc. (NASDAQ:AAPL) during Q1 2022.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based diversified technology company providing consumer electronics, personal computers, software, and other related products and services.
Gregg Moskowitz at Mizuho has given Microsoft Corporation (NASDAQ:MSFT) stock a target price of $340 with a Buy rating in a note issued on July 19. The analyst highlighted that software stocks are under pressure due to currency headwinds, inflation, rising interest rates, and supply chain-related challenges. However, Microsoft Corporation (NASDAQ:MSFT) is fundamentally strong with stable demand for Azure cloud and Office 365. Microsoft Corporation (NASDAQ:MSFT) also provides an attractive risk and reward profile to investors with the ability to reward in the medium term.
Microsoft Corporation (NASDAQ:MSFT) was mentioned in the Q1 2022 investor letter of Baron Funds. Here’s what the firm said:
“Shares of mega-cap software company Microsoft Corporation (NASDAQ:MSFT) pulled back with the broader software sector. The company posted another solid quarter, highlighted by total revenues increasing 20% and Microsoft Cloud revenues, now 45% of total revenues, growing 32%. These results were driven, in large part, by strong demand for large Azure contracts. We believe Microsoft can compound revenue in the low double digits for the next three years, underpinned by its expansion in its total addressable market and market share gains.”
Of the 912 hedge funds tracked by Insider Monkey at the end of Q1 2022, Microsoft Corporation (NASDAQ:MSFT) was held by 259 hedge funds.
You can also take a peek at the Top 10 Stock Picks of Citadel’s Wellington Fund and 10 Dividend Stocks to Buy According to John Allison’s Unio Capital.
