Thu, March 24, 2022 | 7:50PM ET

Five of Our Favorite Stocks With Pricing Power

Name: FS Insight
Price range: $$$

FS Insight Team

Key Takeaways

Pricing power is a key consideration in markets subject to inflation risk. There are several ways companies can achieve pricing power, by selling essential components, having strong brand value, or continually providing more value to consumers.
Inflation has been persistently high as a result of supply chain kinks and an anomalous ratio of goods consumption to services consumption.
We believe inflationary pressure from the war in Ukraine could be prolonged, but it could also collapse quickly if a peaceful resolution is unexpectedly achieved.
In alpha-driven markets, where stock picking becomes more important, the pricing power of a company should always be a key consideration. We discuss five of our favorite names that have this capability.

The last installment of this column was dedicated to picking stocks for an extended commodity shock. We focused on stocks that are idiosyncratically poised to benefit from what will likely end up being the largest commodity shock in modern history given the breadth of affected commodities spanning agriculture, metals, and energy, which are directly impacted by the tragic conflict in Ukraine. While we believed supply chain issues associated with COVID were beginning to alleviate (and there is data to show this), the war threatens to create a whole new set of problems. So, the ultimate direction and persistence of inflation are very much up in the air and unpredictable.

The Molodovosky Effect

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