In this article, we will look at 5 stocks to profit from inflation. If you want to explore similar stocks, you can read 10 Stocks to Profit from Inflation.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 61
On June 9, Atlantic Equities analyst Daniela Nedialkova reiterated her $615 price target and Overweight rating on Costco Wholesale Corporation (NASDAQ:COST). As of June 23, Costco Wholesale Corporation (NASDAQ:COST) has gained 21.15% over the past twelve months. Costco Wholesale Corporation (NASDAQ:COST) is one of the beneficiaries of inflation as the big-box retailer can pass on rising costs to consumers, while consumer spending on staples is expected to remain more or less the same.
At the close of Q1 2022, 61 hedge funds were long Costco Wholesale Corporation (NASDAQ:COST) with stakes worth $5.41 billion. This is compared to 57 hedge funds in the previous quarter with stakes of $5.40 billion. The hedge fund sentiment for the stock is positive.
As of Q1 2022, Fisher Asset Management is the most bullish hedge fund investor in Costco Wholesale Corporation (NASDAQ:COST), having stakes worth $2.43 billion.
Here is what ClearBridge Investments had to say about Costco Wholesale Corporation (NASDAQ:COST) in its fourth-quarter 2021 investor letter:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 64
As of June 23, The Coca-Cola Company (NYSE:KO) has gained 14.14% over the past twelve months and has a forward dividend yield of 2.88%. The company has grown its dividends for roughly 6 decades.
On June 21, Morgan Stanley released its list of “top stocks insulated from risk with recession not fully priced in”, in which they mentioned stocks that the bank’s analysts have Overweight ratings on. The Coca-Cola Company (NYSE:KO) was among the bank’s top consumer staples picks.
At the end of Q1 2022, 64 hedge funds were long The Coca-Cola Company (NYSE:KO) with stakes worth $29.17 billion. This is compared to 70 positions in the preceding quarter with stakes worth $28.61 billion.
As of March 31, Berkshire Hathaway owns the majority shares of The Coca-Cola Company (NYSE:KO) which makes it the dominating stakeholder. The fund’s stakes are valued at $24.79 billion.
Here is what ClearBridge Investments had to say about The Coca-Cola Company (NYSE:KO) in its fourth-quarter 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 consumer staples (Coca-Cola). 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. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 67
As of June 23, Occidental Petroleum Corporation (NYSE:OXY) has climbed 76.72% over the past twelve months and has a PE ratio of 8.39, making it an undervalued energy stock to buy to profit from inflation. This June, Truist analyst Neal Dingmann raised his price target on Occidental Petroleum Corporation (NYSE:OXY) to $93 from $88 and reiterated a Buy rating on the shares.
On May 10, Occidental Petroleum Corporation (NYSE:OXY) announced earnings for the first quarter of fiscal year 2022. The company registered an EPS of $2.12 and beat estimates by $0.09. Moreover, the company’s revenue amounted to $8.53 billion, up 55.74% year over year, ahead of expectations by $473.11 million.
At the close of Q1 2022, 67 hedge funds disclosed ownership of stakes in Occidental Petroleum Corporation (NYSE:OXY). The total value of these stakes amounted to $12.61 billion, up from $3.86 billion in the previous quarter with 58 positions. The hedge fund sentiment for the stock is positive.
As of March 31, Berkshire Hathaway is the top shareholder in Occidental Petroleum Corporation (NYSE:OXY). The fund owns over 136.37 million shares of the company which brings its stakes to $7.73 billion.
Here is what Smead Capital Management had to say about Occidental Petroleum Corporation (NYSE:OXY) in its “Smead Value Fund” third-quarter 2021 investor letter:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 72
Analysts are bullish on The Procter & Gamble Company (NYSE:PG) and the stock is on an upward trajectory, which is why we named it among our stock picks to profit from inflation. As of June 23, The Procter & Gamble Company’s (NYSE:PG) trailing twelve-month returns are up 6.85%. On June 21, Deutsche Bank analyst Steve Powers slashed his price target on The Procter & Gamble Company (NYSE:PG) to $157 from $171 but reiterated a Buy rating on the shares. On June 19, Goldman Sachs released their stock picks for investors looking to take up stakes in stable income companies, and The Procter & Gamble Company (NYSE:PG) was one of them.
At the close of Q1 2022, 72 hedge funds held stakes in The Procter & Gamble Company (NYSE:PG). The total value of these stakes came in at $6.06 billion. This is compared to 67 positions in the previous quarter with stakes worth $6.61 billion.
As of March 31, GQG Partners is the largest stakeholder in The Procter & Gamble Company (NYSE:PG) having stakes of more than $1.51 billion.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Exxon Mobil Corporation (NYSE:XOM) is one of our top energy stock picks to profit from inflation. As of June 23, the stock has a trailing twelve-month PE ratio of 14.12, a forward dividend yield of 4.01%, and has gained 32.54% over the past twelve months. The stock is trading at a bargain right now, maintaining consistency with growing its dividends, and is climbing, which is why we believe it can be a profitable investment option for investors during the current market situation.
On June 21, Credit Suisse analyst Manav Gupta raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $125 from $115, and upgraded the stock to Outperform from Neutral.
Insider Monkey found 83 hedge funds long Exxon Mobil Corporation (NYSE:XOM) at the end of Q1 2022. The collective stakes of these funds in the company were valued at $8.55 billion. This is compared to 71 hedge funds in the previous quarter with stakes worth $5.38 billion.
GQG Partners is the largest shareholder in Exxon Mobil Corporation (NYSE:XOM) as of the end of Q1 2022. The fund’s stakes in the company were valued at $4.27 billion.
Saturna Capital mentioned Exxon Mobil Corporation (NYSE:XOM) in its fourth-quarter 2021 investor letter. Here is what the firm said:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
You can also take a look at 10 Best Recession Stocks To Buy and 10 Stocks to Buy Before Stagflation Begins.
