JPM Presents 16 Stocks That Will Do Fantastic If Inflation Surges

bubble

Photo: Flickr/Pink Sherbert Photography

Everyone’s talking about inflation right now, and wondering how to invest accordingly.JPM’s Thomas J. Lee and Daniel M. McElligott have looked at past inflationary episodes to get some empirical basis on what does best.

The best industries? Staples, Energy, healthcare, and materials. Cheap large caps also do well.

So they’ve picked 16 companies in these industries, with low PEs, and high market caps that they predict will do well in the event of a rapid inflationary episode.

Newmont Mining

Industry: gold mining

Market Cap: $28.1 billion

2011 PE: 11.6x

Potential upside: 43%

Source: JPMorgan

Barrick Gold

Industry: Gold mining

Market Cap: $47.3 billion

2011 PE: 11.9x

Potential upside: 35%

Source: JPMorgan

Pfizer

Industry: Pharmaceuticals

Market Cap: $152.6 billion

2011 PE: 9.5x

Potential upside: 31%

Source: JPMorgan

Teva

Industry: Pharmaceuticals

Market Cap: $48.3 billion

2011 PE: 9.9x

Potential upside: 28%

Source: JPMorgan

Merck

Industry: Pharmaceuticals

Market Cap: $101.9 billion

2011 PE: 12.0x

Potential upside: 27x

Source: JPMorgan

CVS

Industry: Pharmaceutical retailing

Market Cap: $101.9 Billion

2011 PE: 12x

Potential upside: 26%

Source: JPMorgan

Freeport McMoran

Industry: Copper mining

Market Cap: $50.7 billion

2011 PE: 9.4x

Potential upside: 25%

Source: JPMorgan

Abbot Labs

Industry: Healthcare

Market Cap: $70.3 billion.

2011 PE: 9.9x

Potential upside: 21%

Source: JPMorgan

Apache

Industry: Oil

Market Cap: $42.3 billion

2011 PE: 10.3x

Potential upside: 20%

Source: JPMorgan

Amgen

Industry: Biotech

Market Cap: $51.4 billion

2011 PE: 10.6x

Potential upside: 19%

Source: JPMorgan

Gilead

Industry: Biotech

Market Cap: $30.6 billion

2011 PE: 9.9x

Potential upside: 18%

Source: JPMorgan

Wellpoint

Industry: Healthcare

Market Cap: $25.6 billion

2011 PE: 9.9x

Potential upside: 16%

Source: JPMorgan

Aetna

Industry: Healthcare

Market Cap: $14.9 billion

2011 PE: 13.3x

Potential upside: 15%

Source: JPMorgan

Covidien

Industry: Healthcare equipment

Market Cap: $24.5 billion

2011 PE: 13.3x

Potential upside: 15%

Source: JPMorgan

Cigna

Industry: Healthcare

Market Cap: $11.6 billion

2011 PE: 9.0x

Potential upside: 14%

Source: JPMorgan

Peabody Energy

Industry: Energy

Market Cap: $16.5 billion

2011 PE: 12.9x

Potential upside: 12%

Source: JPMorgan

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.