7 Stocks That Are Good Investments In Inflation

Analysts recommend these inflationary stocks.

Department of Labor reported that the consumer price index jumped 8.6% in May, which was the biggest gain since 1981. The Federal Reserve has aggressively raised interest rates to combat inflation, but many investors fear that prices won't fall anytime soon. Bank of America recently compiled a pro-inflation stock rating to identify stocks that have historically shown a strong positive correlation with inflation. While other companies are struggling with rising costs, inflation may actually help these stocks beat expectations. Here are seven inflationary investments for investors looking to protect their portfolios.

Mosaic Co. (ticker: MOS)

Analyst Steve Byrne says Mosaic's recent update to its second-quarter forecast suggests potash and phosphate production volumes in April and May were likely well below his forecast. However, Byrne says he remains optimistic about the medium and long-term prospects for fertilizers, especially potash and nitrogen. He says the phosphate market in China may become tougher in the long run. After the guidance update, Mosaic shares are still trading at just 3.9 times Byrne's 2022 earnings per share estimate of $12.45. Bank of America has a "buy" rating and a $77 target price for MOS shares, which closed at $44.52 on July 5.

APA Corp. (APA)

Formerly known as Apache, APA is a major American oil and gas exploration and production company. Analyst Doug Leggate says investors are not fully aware of how much the APA management team has improved virtually every aspect of the company's operations in recent years, from increasing cash flow to stock buybacks and improving the balance sheet in addition to improving environmental, social and management practices. Leggate says management has completely reviewed and optimized the company's asset portfolio, allowing APA to potentially buy back 60% of the shares over the next three years. Bank of America has a "buy" rating and a $68 target price for APA shares, which closed at $32.73 on July 5.

Applied Materials Inc. (AMAT)

Applied Materials is the world's leading manufacturer of wafer manufacturing equipment for the semiconductor industry. Analyst Vivek Arya says that the closure of production in Shanghai affected sales of Applied Materials in the first quarter, but there were also a few moments in this quarter that could be liked. The record number of orders and the growing backlog suggest that conditions are still limited by supply, not demand. Revenue from services increased by 15% in the quarter. In addition, Applied Materials repurchased $1.8 billion worth of shares in the first quarter, which is about 2% of the total number of outstanding shares. Bank of America has a "buy" rating and a $135 target price for AMAT shares, which closed at $86.00 on July 5.

Halliburton Co. (HAL)

Halliburton is a leading oilfield services company in the USA. Analyst Chase Mulvehill says that shares of Halliburton and other oilfield services companies will benefit from the fact that companies engaged in oil and gas exploration and production will again feel the need to drill new wells. Halliburton shares are up 40.9% year-on-year, but Mulvehill says they are still cheap at a projected profit of just 12.1 times. Mulvehill says the increased drilling demand, combined with supply chain and labor market constraints, has created a very favorable pricing environment for oilfield services stocks. Bank of America has a "buy" rating and a $47 target price for HAL shares, which closed at $28.89 on July 5.

Advanced Micro Devices Inc. (AMD)

Advanced Micro Devices, a semiconductor company, manufactures personal computer central processing units (CPUs) and graphics processing units (GPUs), as well as server chips for data centers. Arya says that AMD's recent Analyst Day event showed that the company is expanding its product portfolio and increasing its share in key growing markets. Arya estimates that AMD's total addressable market is $300 billion, including data centers, PCs, games, communications, and advanced auto applications. The next-generation AMD Genoa 5nm server processor will be launched at the end of 2022. Bank of America has a "buy" rating and a target price of $160 for AMD shares, which closed at $75.20 on July 5.

SVB Financial Group (SIVB)

SVB Financial is the parent company of Silicon Valley Bank, a commercial bank specializing in technology, life sciences, wineries, and private equity and venture capital companies. SVB shares have fallen 39% year-on-year due to concerns that a sharp drop in valuations in the technology sector could eventually affect SVB's early-stage venture capital clients and individuals. Analyst Ebrahim Punawala says SVB's revenue growth in the first quarter and an increase in forecasts should help ease investor concerns about the weakness of the bank's core business. Punawala says SVB shares are cheap, given the possibility of annual revenue growth of 30%. Bank of America has a "buy" rating and a $725 target price for SIVB shares, which closed at $412.41 on July 5.

Tapestry Inc. (TPR)

Tapestry is the parent company of luxury brands Coach, Kate Spade New York and Stuart Weitzman. The company produces accessories, bags, shoes, perfumes and other goods. The price increase will most likely not scare off Tapestry's elite customer base. Analyst Lorraine Hutchinson says ongoing quarantines and restrictions in China will negatively impact Tapestries' fourth-quarter financial performance, but its overall fundamentals remain strong. Hutchinson says Kate Spade is a successful turnaround story, and the coach remains a consistent performer. In addition, the company expects a $1.6 billion share buyback in fiscal year 2022. Bank of America has a "buy" rating and a $55 target price for TPR shares, which closed at $31.34 on July 5.