These Stocks Could Be the Biggest Winners of the Stock Market Sell-Off
Given that the market has been stressed recently with fears over rising raw material prices stoking inflation and possibly higher interest rates, it makes sense to start looking at some companies that might benefit from these conditions. Two names that spring to mind are Caterpillar (NYSE: CAT) and copper miner Freeport-McMoRan (NYSE: FCX). Sometimes the charts don't lie, and Caterpillar and Freeport are up 5% and 24%, respectively, in the last month while the S&P 500 is down almost 1%. Here's why both could continue to be big winners in 2021.
It might seem strange to designate highly cyclical stocks like Caterpillar and Freeport as winners from a market sell-off. Still, all cycles are different, and investors need to adjust their playbooks when facing other opposition.
The case for Caterpillar rests on the idea that the global economy will continue its cyclical recovery but will have to adjust to higher raw material prices. The company is well known for its construction and infrastructure equipment. However, Caterpillar is also a significant player in the energy (oil) and resources (mining and aggregates) equipment sector. A robust long-term recovery in those industries will lead to a substantive increase in the company's profitability.
Source Fool.com
