Rising inflation can hurt businesses by raising costs on their inputs. If the company is not able to pass along those higher prices to its customers, then it could shrink its profit margins.
In this segment of "The Five", recorded on Dec. 14, Fool.com contributor Parkev Tatevosian discusses why Disney (DIS -1.01%) is one of his top stocks to buy during inflationary periods.
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Parkev Tatevosian: As I mentioned earlier, I have bought three stats earlier in the year that I thought would do well during inflationary periods, business Starbucks and Coca-Cola. But out of those three, I think the one that we'll do the best is Disney. Over the last several decades, it's been able to increase prices at its theme parks at a rate faster than inflation and folks are willing to pay those higher prices. In its most recent earnings call management stated that guest spending at its theme parks, are 30 percent higher than at the same time in 2019. Listen, I bought annual passes for Disneyland and I can tell you the parks are full there are lines everywhere. People lining up to pay five dollars for a bottle of soda, including myself. I don't think if Disney were to increase prices by 10-15 percent, that they would lose a significant amount of their customers and even if they did, that would improve the park experience for the other group of customers that are now there, that don't have to wait in as long of lines so the other group of customers would be willing to pay higher prices still. That's one that I think will do best during inflationary times.
