With inflation on the rise, what are some stocks investors should look at during this economic environment? In this video clip from "Ask Us Anything" on Motley Fool Live, recorded on Feb. 28, Fool.com contributors Nicholas Rossolillo and Dan Caplinger share their advice on what kinds of companies to consider.
10 stocks we like better than Berkshire Hathaway (B shares)
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Berkshire Hathaway (B shares) wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 3, 2022
Nicholas Rossolillo: Companies right now that are consistently profitable, and that are growing those profits at that faster than 7% or higher rate, like Matt was just talking about. If we temporarily go up into double-digits, you want to look for companies that are growing those profits, faster than inflation.
I think a good starter stock for that would be Berkshire Hathaway (BRK.A -0.30%) (BRK.B -0.26%). Warren Buffett's letter to shareholders came out this past weekend. It's always a fantastic read. Super educational, it often gets overlooked because Berkshire's underperformed the market for over a decade.
But that's starting to change during the last year. I think those businesses in there, the infrastructure businesses, that Buffett wrote about in his letter, the railroad, the insurance business, the energy business, all that will do very well in an inflationary environment.
Then one of the top stocks in his portfolio, Apple (AAPL 0.52%) also growing their profitability at a very fast rate. They plow all of that cash back into returns to shareholders, specifically share buybacks. That does wonders for us, for owners of the company. I think that's another one that will be just fine in an inflationary period.
If we think about boring stocks, but ones that are still growing, that's a great place to start when you're looking for stocks that are going to beat inflation if this becomes a problem longer-term.
Dan Caplinger: That's a great perspective, Nick, and it's also something that's consistent with what I've heard more broadly about a lot of folks turning to the protective power of well-known brands. Apple is one of the most powerful consumer brands out there able to pass through any inflation-related cost increases that they have.
Other companies that have that brand power, that pricing power. Even if they have premium prices on their products right now, as their costs go up, they're able to maintain their margins by passing their higher costs through. That's definitely something that tends to shelter you from inflation.
