Core inflation, which excludes food and energy prices, rose 0.9% last month, which was the most since 1982. A rise in inflation has both growth and value investors concerned, as higher inflation discounts a growth stock’s present value and raises the likelihood that the Fed will raise rates, harming cyclical stocks. These factors have raised market volatility and drove stocks down. Whether the current market environment is temporary or could go on for a while, it’s best to be more selective when picking stocks.
One strategy I like to focus on is picking stocks that have both fundamental and technical strength. So, I ran a screen for stocks rated a Buy in our POWR Ratings system that exhibits strong fundamental and technical indicators. Three top stocks that made the list were Boyd Gaming Corporation (NYSE:BYD), Owens Corning (NYSE:GLW) Inc (OC), and O’Reilly Automotive, Inc. (ORLY), which I’m highlighting below.