As U.S inflation stays scorching and the Federal Reserve appears to be like to proceed on its tightening path, analyst Keith Fitz-Gerald believes some companies are clearly higher than others at navigating this troublesome surroundings. Client costs within the U.S. rose 9.1% in June from a 12 months in the past — the quickest tempo of inflation since November 1981. Some market watchers imagine falling oil and gasoline costs this month point out that client inflation could have lastly peaked , however Fitz-Gerald, a non-public investor, analyst and researcher, shouldn’t be satisfied. “Inflation shouldn’t be peaking. Not even by a little bit. Gasoline is down as a result of merchants are pricing in a recession, not as a result of charges are rising,” Fitz-Gerald, principal at analysis agency Fitz-Gerald Group, informed CNBC final week. He believes bigger price hikes are merited even when it results in market dislocation. “It is merely time to pay the piper for years of badly conceived low cost cash insurance policies,” he added. Picks from the ‘high of the meals chain’ In opposition to this backdrop, Fitz-Gerald says it’s crucial to be selective in selecting shares. “You need to be enjoying on the very high of the meals chain with the perfect names you should buy. Low-beta, excessive dividend, huge tech, protection,” he stated. “There are nonetheless nice corporations placing up nice numbers.” Considered one of Fitz-Gerald’s picks is PepsiCo , a inventory he described as a “bellwether.” “The truth that the corporate got here out with nice earnings , has robust potential and truly appears to be like ahead to elevating steering and thinks it will possibly preserve increased costs speaks volumes about the place it thinks the enterprise can go,” he informed CNBC’s “Squawk Field Asia” on Friday. “So, should you’re taking a look at right this moment’s markets, and also you’re questioning about the place to cover or what inventory can present stability, that is an amazing instance.” One other client inventory excessive on Fitz-Gerald’s checklist is warehouse membership retailer Costco , which he stated is “completely important” as inflation forces shoppers to tighten their belts. He believes Costco is the “form of firm you need to personal” attributable to its skill to assist shoppers stretch their greenback. “They’ve a rabid buyer base, they have growing revenues, they’re able to improve their throughput they usually have managed to step apart from many of the provide chain issues which can be plaguing different lesser important decisions,” he stated. Learn extra Morningstar strategist says two FAANG shares look extremely low cost proper now Morgan Stanley’s Wilson predicts the S & P 500 trough: It is going to come ‘fairly rapidly’ This fund supervisor oversees $10 billion. This is the place he is investing as inflation stays excessive ‘Logical’ tech performs Tech shares have borne the brunt of a broad and large sell-off in shares this 12 months, however Fitz-Gerald believes that not all tech corporations are produced from the identical mildew. Traders ought to clearly distinguish between corporations that shall be round for the long term and people which can be susceptible to provide chain dangers and stock overhang, he stated. Fitz-Gerald says cybersecurity is a “logical play,” given the significance of defending knowledge and what he thinks shall be sustained capital expenditure on this house. “Everyone’s altering what they’re shopping for within the grocery retailer or in Costco or in a few of the retailers, however what no one has heard of but is giving up their iPhone or their Android. That appears to point how shoppers take into consideration knowledge,” he stated. “When you have a look at corporations, they will have to guard all that. So, cybersecurity is a logical play right here.” As such, buyers ought to give attention to corporations resembling Apple and Texas-based cybersecurity agency CrowdStrike , he stated. “That is the place you need to be centered as a result of these are the businesses which can be going to outlive and plow ahead even when the remainder of the market takes a header,” he added.