5 Best Inflation-Proof Stocks

2. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 89  

Although technology stocks do not usually make for good inflation hedges, there are a few exceptions. Adobe Inc. (NASDAQ:ADBE), the software firm based in California, is one such company. The suite of professional products that the company markets, many of which dominate the competition, are likely to give the company stable revenues even during an economic crisis since they remain central to the working of the digital economy. 

Wells Fargo recently termed Adobe Inc. (NASDAQ:ADBE) the “crown jewel” of software firms, just before the company posted earnings results for the third quarter that smashed analyst expectations on earnings per share and revenue. 

Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Adobe Inc. (NASDAQ:ADBE) with 6.2 million shares worth more than $3.6 billion.

Here is what Polen Capital has to say about Adobe Inc. (NASDAQ:ADBE) in its Q1 2021 investor letter:

“Adobe and Autodesk are both prime examples of the rotation that occurred during the quarter. Both are dominant businesses in their respective markets, which are experiencing structural tailwinds. Despite each business’s position of strength, the stocks of cyclicals and businesses with higher leverage and lower profitability were more favored this past quarter. In stark contrast, Adobe and Autodesk both have low leverage, high levels of profitability, high recurring revenues that mitigate cyclicality, and are both capital-light business models—all attributes we appreciate as investors. Adobe and Autodesk were also two of the top three performers within the Portfolio during 2020.”