Fears of inflation have rocked the market over the past three days, with the S&P 500 dropping 4% and the Nasdaq Composite losing 5.2%. Today the market was reacting to news that the Consumer Price Index posted its largest month over month increase since 2009 and its largest year over year rise since 2008. I've got three stocks I like right now even amidst the market turmoil, but first I'll explain why stocks are down.

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 (BYD), Owens Corning Inc (OC), and O'Reilly Automotive, Inc. (ORLY), which I'm highlighting below.

Boyd Gaming Corporation (BYD)

BYD is a multi-jurisdictional gaming company. The company owns and operates 29 gaming entertainment properties in multiple states with 36,977 slot machines, 809 table games, and 11,090 hotel rooms.

The company is increasing its brand presence through expansions into Northern California with Wilton Rancheria resorts, which is expected to open by the second half of 2022. BYD has also expanded its online betting offerings. In 2018, it partnered with MGM Resorts to offer its online and mobile gaming platforms. In 2019, it partnered with FanDuel Group to open sports books to multiple properties in the Midwest.

It also introduced its mobile app in Pennsylvania. It even announced a partnership with the NFL, where FanDuel will provide endgame and postgame highlights in its Sportsbook app. It is also seeing strong performance in its interactive gaming platform, which bodes well for its future in the iGaming industry. As more people are vaccinated and go out, an increase in traffic to casinos should drive growth going forward.

BYD has an overall grade of A, which translates into a Strong Buy rating in our POWR Ratings system. The company has a Quality Grade of B, which indicates a strong balance sheet. The company increased its cash from $519 million in December to $731 million in March. BYD also has a Growth Grade of A, as revenue is expected to rise 494% in the current quarter.

While the stock has retreated over the past couple of days along with the rest of the market, its long-term technical look strong. We also grade BYD based on Value, Momentum, Stability, and Sentiment. You can find those grades here. BYD is ranked #1 in the Entertainment – Casinos/Gambling industry. You can find other top stocks in this industry here.

Owens Corning Inc. (OC) 

OC is a leading manufacturer of glass fiber utilized in composites and building materials. Its products include glass fiber used to support composite materials for transportation, electronics, marine, infrastructure, wind energy, and roofing for residential, commercial, and industrial applications.

The company has implemented growth initiatives to drive performance. For instance, its insulation segment has benefited from geographic and product expansion through acquisitions. OC is also using in-process technology to improve manufacturing efficiencies and reduce costs. The company is also investing in new insulation materials and systems to expand its global footprint.

OC sees robust demand for its insulating products due to increased commercial and industrial construction activity, new residential construction, remodeling, and repair activity. In the first quarter, the insulation segment's sales were up 16.1% year over year. Plus, OC's 2018 acquisition of Paroc, a leading producer of mineral wool insulation in Europe, has expanded the company's presence in Europe.

The company has an overall grade of A, which is a Strong Buy rating in our POWR Ratings system. The company has a Quality Grade of B due to a strong balance sheet and ample liquidity. The company's return on equity of 18.9% is also notable. OC has a Momentum Grade of B, driven by strong performance over the past few months.  

For access to the rest of OC's grades (Growth, Value, Stability, and Sentiment), click here. OC is ranked #1 in the A-rated Industrial – Building Materials industry. For more top stocks in this industry, click here.

O'Reilly Automotive, Inc. (ORLY)

ORLY is one of the largest sellers of aftermarket automotive parts, tools, and accessories in the country. It serves both professional and DIY customers. The company sells branded and its own-label products, with the latter category comprising nearly half of sales. Its stores also offer services and programs to customers, such as battery diagnostic testing and check engine light code extraction.

The company has been generating strong revenue growth for a long time. In fact, it has been generating record sales for 28 consecutive years. Its customer-centric business model and growing demand for technologically advanced auto parts should drive long-term growth. With new car manufacturing slowed by the pandemic and a global chip shortage, used car sales are through the roof, which benefits auto parts stores.

ORLY should also benefit from store openings and distribution centers in new regions. The company has been opening stores in new markets and increasing its store count in less-populated areas. Its competitive edge stems from its dual-market strategy of professional and DIY customers and its strong distribution network.

The company has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The company has a Momentum Grade of B, driven by strong performance since mid-February. ORLY also has a Quality Grade of A due to a rock-solid balance sheet. For instance, the company has a net profit margin of 16%. For the rest of ORLY's grades (Growth, Value, Stability, and Sentiment), click here.  

The company is ranked #25 in the A-rated Auto Parts industry. For other top stocks in this industry, click here.

BYD shares were trading at $60.38 per share on Thursday morning, up $1.99 (+3.41%). Year-to-date, BYD has gained 40.68%, versus a 10.54% rise in the benchmark S&P 500 index during the same period.

David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a Consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers.

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