Inflation is bad news for bond investors but can be less “’categorically awful” for equity traders, “given the ability of certain companies to wring profits from higher prices.” This according to a recent Bloomberg article.

Despite the stock-market casualties that an inflation spike could cause, the article notes that “history suggests the landscape isn’t devoid of opportunity,” noting Ned Davis Research findings showing energy shares as winners in inflationary environments over the past five decades. Goldman reportedly recommends companies “better equipped to derive earnings from sales,” (think auto manufacturers) while Société Générale suggests mining companies and fertilizer producers offer better hedging opportunities if price pressure were to build.

The article concludes that while the effects of inflation for the broader market are not straightforward, “a look under the surface shows investors are preparing for the outcome by favoring companies with high operating leverage, or the ability to extract profits from revenue.”