These stocks could survive shortages, inflation and covid


THREE some of the most hated words right now have to be covid, inflation, and shortages. On their own, they are quite emotional. Put them together and they take on a whole new level of danger. Especially when you recognize the fact that none of these issues are exactly transient, either.

Take the latest FTSE rework. Covid and supply chain issues matter when it comes to filtering out winners and losers in this quarterly review. Never mind the fact that it only took one comment from Moderna’s boss, on the potential inability of vaccines to push back the new variant, to deflect global markets.

And then there is inflation. This year, the price of goods and services has increased more than any year since 2008. And this is largely due to shutdowns / starts, closures and then the rapid reopening of our economy, which have caused multiple shocks. that have all been pushing inflation up. Supply and demand drove prices up, causing costs to skyrocket. Take container shipping rates, which have increased three to four times in as many months.

But there is a positive side to the rise in inflation; if not for consumers at least for companies and those who invest in them. Inflation is actually good for some companies, increasing profits for those in sectors that can raise prices. While some – usually smaller – companies that find themselves stuck in a corner unable to raise prices will struggle, others, with the opportunity to relax their pricing power, might find the environment inflationary. transformer.

So who are we talking about? Namely large, established companies with the power to raise prices and the strength to deal with short-term problems of freight, inventory supply, etc. Think about miners exposed to industrial metals, such as Rio Tinto and BHP, which also provide exposure to the wider global economy. Paper and packaging companies like DS Smith and logistics giants Royal Mail, James Fisher and Wincanton.

On the retail side, where the winners of the pandemic depend less on rising prices, but rather on simple demand, companies like Pets at Home and Dechra Pharmaceuticals are both perfectly poised to cash in on the pandemic boom in pets.

About Nicole Harmon

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