As markets plunged following a hotter-than-expected inflation report, CNBC Pro found a raft of names for traders battening down the hatches to weather further volatility. Stocks tumbled after the August consumer price index report showed headline inflation gaining 0.1% month over month, in spite of a drop in gas prices, spelling choppiness ahead. Core inflation rose 0.6% month over month. A surprisingly hot inflation report could mean higher interest rates for longer from the Federal Reserve, and it even raises the probability of a full percentage point rate hike at its September meeting. The central bank was widely forecasted to issue a 0.75 percentage point rate increase next week. CNBC Pro surfaced a basket of inflation-fighting stock picks that could help investors brace for more challenges. These companies are expanding margins, with gross margins up at least 1 percentage point year over year, even with rising costs, according to FactSet. They’re also expected to grow earnings significantly, with earnings per share growth of at least 10% forecasted. With a beta of less than 1, they also ensure a smoother ride for investors. Plus, they’re beating the market this year, with shares down less than 15%. Here are the names. Oil and gas company Coterra Energy expanded margins at a rapid clip over the past year. The company raised gross margins by 27.1 percentage points from the year-ago period. Analysts expect that earnings per share growth will be roughly 128% this year, according to consensus estimates from FactSet. And it’s expected to be more stable than other stocks with a -0.07 3-year beta. Shares are up nearly 62% this year. Global insurance brokerage firm Arthur J. Gallagher & Co . raised margins by 14.8 percentage points over the past year, according to FactSet. Earnings per share are predicted to grow by 42% this year. The finance stock has a 0.75 beta. Shares are up 10.6% in 2022. Self-storage company Public Storage increased gross margins by 3.7 percentage points from one year ago. Earnings per share growth is forecasted to be 12.2% this year. Public Storage has a 0.48 beta. The stock is down 9.4% this year. Other stocks included in this list include Agilent Technologies , Automatic Data Processing , Cummins , Dollar Tree , International Paper and more.
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