A headline look at the Consumer Price Index shows a flat reading from January to February, however in looking beyond the headline I found an interesting trend in the education category. It shows educational books and supplies are increasing at a rate of 7% year over year and about 0.5% month over month for the last three months. This trend sent me on a search to find the most pure educational supply company that trades publicly. My search results found a company called School Specialty (SCHS). The company has a low P/E and should be a direct beneficiary of increasing educational supply prices. Trade: Long School Specialty (SCHS) @ $21.48 (Stop Loss: $19 & Take Profit: $25)
I also noticed the medical care and medical supplies categories increasing at almost an annual pace of 5% in the last three months, but with the uncertainty of health care reform I am going to stay away from any stocks related to medical supplies and services until the future becomes a bit more clear. Trade: None
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