2009-06-03 14:41:46
Which Companies are Doing Well in the "Great Recession"?
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When you are faced with an unending stampede of negative economic information, you can start to think that every single company in the United States is suffering through the "Great Recession".
It may seem that way - but that's not the case.
There are five very big companies that have done extremely well over the past couple of years. This is by no means a comprehensive list of the companies that are currently doing well - rather, this is a list of five companies that you have likely heard of that continue to grow their businesses during one of the worst economic downturns in modern history.
Four of the companies have outperformed due to Americans tightening their pursestrings, while one company continues to do well for completely different reasons.
1. McDonald's. What is one of the easiest and quickest ways to pare your expenses? Spend less money on food and drink. McDonald's has thrived and Starbucks has suffered over the past couple of years for the same reason - Americans are looking to get more bang for their buck when it comes to their food and drink costs. Many American families are choosing to buy take-out dinners at McDonald's, rather than have an expensive sit-down meal at another chain. Value Meals are in, $5 frappuccinos are out. McDonald's, Burger King, and Wendy's are all doing well right now, for all of the same reasons. American families are cutting back in a big way on their food costs.
McDonald's is currently just a few dollars off of its all-time high of $67.00.
2. Amazon.com. Remember when Amazon.com surged during the dot-com boom, and subsequently took a major tumble?
Well, it has since resurrected itself, and is currently trading at $85.68 (right near its 52 week high).
A few years ago, many Americans would take frequent trips to the mall. While they were there, they would pick up their books, CDs, DVDs, etc.
Nowadays, many Americans are staying far away from the malls, as they don't have much in the way of disposable income.
However, they still want their DVDs, CDs and books.
Enter Amazon.com. Amazon.com has made it SO easy to buy items online. Their one-click technology and Amazon Prime program (which has become wildly popular) has made it possible to purchase an item from their store and have it in your hands in just a couple of days.
Many people consider Amazon.com to be an indispensable part of their lives now. Not only is the site incredibly intuitive and easy-to-use, but it allows people to save time and money. No wonder Amazon.com is thriving.
3. Autozone. Another company that is trading just a few dollars off of its all-time high.
Autozone is an automotive parts distributor and retailer.
The reason for their success is simple - many Americans are delaying new vehicle purchases and are instead choosing to repair their current vehicles.
New car sales are WAY down in the United States, but the sales are auto parts are WAY up.
Many Americans are opting to repair and upgrade their existing vehicles themselves, instead of taking their cars to a mechanic. This is just another way for them to save money.
Autozone continues to thrive, and I don't see this changing until Americans suddenly develop an appetite for new vehicle purchases once again (but when will this happen?)
4. Wal-Mart. Specialty grocers and retailers (meaning, more expensive) are out, and Wal-Mart is back in.
Wal-Mart is currently trading at around $51, which is a bit off of its 52 week high of $63.85.
That being said, the company has held up extremely well during this economic meltdown. The reason is fairly obvious - due to their super-efficient supply chain, Wal-Mart is able to offer lower prices (on average) than any other retailer out there.
Shoppers are foregoing more expensive retailers and are choosing to save money at Wal-Mart.
This is bad for smaller (and more expensive) retailers, but great news for Wal-Mart.
Wal-Mart "supercenters" have proven to be especially popular during the "Great Recession".
Visit any Wal-Mart on a Saturday afternoon and tell me if they aren't absolutely packed. McDonald's benefits yet again from this trend, as many Wal-Marts across the country also have a McDonald's in them.
5. Apple. Apple demonstrates the mighty power of two things:
a) an innovative product line
b) a rabid and loyal following
Apple is currently trading at $140.95 - their 52 week high is $189.95. Given the damage that the markets in general have suffered over the past few years, Apple has done exceedingly well. Since the start of the "Great Recession" (December 2007), Apple has held their value very well and continued to grow their business.
You would think that people would be holding off on new electronics and computer purchases in their environment.
With Apple, that's not the case.
People still continue to line up for the newest IPhones, IMacs and IPods.
Apple has tremendous brand recognition, an intensely loyal following and a constant stream of new products.
It's not a surprise that they continue to do well.
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These are five MAJOR publicly traded companies that have dramatically outperformed any major market index over the past two years. They are all worth billions upon billions of dollars, and they have all found a way to grow their businesses during the worst economic downturn of our lifetimes.
Filed under: General Knowledge
COMMENTS
Comment by Dave on June 04, 2009 @ 3:00 am
Hi Anonymous Coward
Thanks for the comment.
You hear about plenty of people making the switch from a PC to a Mac - however, how often do you hear of people swearing off of Macs in favor of the PC? This is why I think that Apple will do so well over the long-term - they have an incredibly fanatical user base (count me as one of those).
You're right about the TV device for sure.. agree 100%
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Comment by Anonymous Coward on June 03, 2009 @ 10:19 pm
I just became an Apple convert. My son converted me. I got an iPod touch along with a mac book and the Touch is really awesome. Apple has the content and sales channel, they have the handheld, they just need the tv device to take off (Apple TV is a weak).
Apple could be getting close to making a big breakthrough into the home.
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