Are these stocks safe from inflation, currency fluctuations?

Highlights

• Inflation rose by 5.3% in the 12 months to August, the Labor Department said.
• The US Dollar Index (DXY) jumped 1.88% in the past three months and 4.69% YTD.
• Typically, when inflation rises, the value stocks benefit, but growth stocks decline.

US inflation rose by 5.3% in the past 12 months through August while approaching almost its 12-year high, labor department data showed. The inflation has been compounded by supply chain woes and massive government spending in covid-recovery schemes.

Also, consumers’ strong purchasing power due to robust covid financial support accelerated demand for various goods in the market even as suppliers struggled to keep up with the pace, leading to an abrupt rise in prices as the gap in demand and supply grew.

However, most analysts believe the current inflation is temporary, and it would plateau after the covid-related market disruptions settle, likely by next year. In recent months, US inflation has been hovering above the Fed’s 2% target. As part of its intervention, the central bank generally tightens the monetary policy to curb the price rise, typically through a rate hike.

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On the other hand, the US dollar hit a 12-month high last month. Although it is currently steady, it remains close to its September high.

An appreciating dollar could impact exports but benefit imports. The US Dollar Index (DXY) rose by 1.88 percent in the past three months while rising by 4.69 percent YTD.

Besides, the recent spike in global energy prices also raised tensions in the market about worsening inflation. However, the subsequent drop in their prices helped ease those fears.

Amid these concerns, the S&P 500 Index (SPX) saw muted gains of 2.40 percent in the past three months compared with 17.80 percent YTD.

Here we discuss five stocks that have performed well on a YTD basis despite these factors.

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Moderna, Inc. (NASDAQ:MRNA)

The stock of this Massachusetts-based biotechnology company rose by 189.5 percent YTD.

Moderna launched its IPO in 2018. In the next three years, its market cap grew to US$125.8 billion. Its P/E ratio is 38.87 and the forward P/E one year is 10.38. Its EPS is US$8.02.

Moderna’s 52-week highest and lowest stock prices were US$497.49 and US$65.49, respectively. On Oct 6, the stock closed at US$302.42 with a trading volume of 17,457,370.

The company’s bottomline grew after its covid vaccine hit the market. For the quarter ended June 30, 2021, Moderna posted revenue of US$4.35 billion and net income of US$2.78 billion. The earnings per share diluted were US$6.46 at the end of the quarter.

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BioNTech SE (NASDAQ:BNTX)

BioNTech is a Germany-based biotechnology company. Its stock rose 189.7 percent YTD.

The company has developed a covid vaccine in collaboration with the American multinational pharma giant Pfizer. It is also developing a cancer drug.

BioNTech’s current market cap is US$60.3 billion, the P/E ratio is 13.03, and the forward P/E one year is 6.09. Its earnings per share is US$19.11.

BNTX posted revenue of US$590 million and a net income of US$18.59 million for FY 2020.

Its 52-week highest and lowest stock prices were US$464.00 and US$75.34, respectively. The stock closed at US$236.14 on Oct 6, with a trading volume of 2,434,175.

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Fortinet, Inc. (NASDAQ:FTNT)

Fortinet stock grew 103.2 percent YTD. This cybersecurity company is based in Sunnyvalle, California, and has a market capitalization of US$51 billion. It has a P/E ratio of 100.86 and a forward P/E one-year ratio of 107.02.

For the quarter ended June 30, 2021, the revenue was US$801 million, and the net income was US$137.5 million. The earnings per share diluted were US$0.82.

The 52-week highest and lowest stock prices were US$322.00 and US$106.75, respectively. On Oct 6, the stock closed at US$301.8 with a share volume of 834,252.

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Lucid Group, Inc. (NASDAQ:LCID)

The Lucid stock gained 142.7 percent YTD. This Newark, California-based automotive company has a market capitalization of US$39.2 billion. The company develops next-gen electric vehicles.

The company went public in August 2020. Its net loss for the quarter ended June 30, 2021, was US$0.589 billion.

The Lucid stock price logged a high of US$64.86 and a low of US$9.60 in the last 52-weeks. On Oct 6, the stock closed at US$24.29 with a share volume of 19,270,710.

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Bill.com Holdings, Inc. (NYSE:BILL)

BILL stock gained 100.4 percent YTD. This cloud-based software provider helps in automating back-office financial operations. The company is based in Palo Alto, California. Its current market capitalization is US$28.7 billion, and its beta is 2.42.

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For the fiscal year ended June 30, 2021, the company posted revenue of US$238 million and a net loss of US$98.7 million. While for the 4th quarter ended June 30, 2021, the revenue was US$78.27 million and net loss was US$41.9 million.

Bill.com’s 52-week highest and lowest stock prices were US$301.99 and US$89.19, respectively. On Oct 6, the stock closed at US$273.52 with a treading volume of 1,650,355.

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Bottomline

Traders kept away from risky bets in the recent trading sessions as mixed signals from the economy weighed on their minds. While inflation has been high, lingering supply chain issues spelt more trouble for industries battered by the pandemic. But the central bank is hopeful of a sustained economic recovery with the elimination of the virus threat. Investors, however, should evaluate the companies carefully before investing in the stock market.