7. Walt Disney.
Disney has three businesses which are excellent barometers of economic activity: theme parks, TV programming, and movie production. Disney’s revenue has floundered in the last three years, but cost management has helped it to keep relatively good margins. Visits to movie theaters and theme parks involve hundreds of millions of consumer transactions a year. If that activity picks up significantly, the economy has turned sharply for the better.
As the world’s largest conglomerate, GE’s prospects are a nearly perfect indicator of GDP. The company has a large presence in financial services, medical products, the manufacture of jet engines, energy generation, and appliances. GE’s shares trade at half of what they did three years ago. The market will not help the stock move back up unless it sees a recovery in a number of the businesses in GE’s portfolio.
9. Procter & Gamble.
P&G has an unprecedented number of major consumer product brands, including Gillette, Ivory, Safe Guard, Old Spice, Head & Shoulders, Pampers, and Tide. P&G sells almost $80 billion of these brands worldwide. Consumer spending on modest home care, health care, and beauty products will have to rebound for P&G to have improved sales and a rebound to its share price of three years ago.
10. Bank of America.
The financial firm is an ideal proxy for the financial services industry. It is one of the world’s largest consumer banks. It owns wealth management and brokerage firm Merrill Lynch. BofA is one of the largest mortgage companies in the US. The bank also has a large division that caters to businesses – from those with modest sales to some of the largest corporations in the world. The financial company also has the most visited bank website in the country with nearly 25 million visitors a month. It will require a very broad economic recoveryfor it to be as successful as it was before the recession.
-Douglas A. McIntyre