Fortune 1000 – The Big Movers

August 19, 2020

Post by Robert Hansen

While going through the list of the Fortune 500 for Bit Discovery’s company reports you can download them here, I decided to take a bit of a step back and analyze how COVID was going to affect the entirety of the list over the coming year.  There are a handful of industries that are particularly at risk.  This is a short-hand enumeration of the various sectors that appear to be at the highest risk.  Fragility in a global pandemic situation is to be expected, but the breadth of different companies, even within the top 1000 was staggering.

Specialty Retailers: Other, Specialty Retailers: Apparel, and Apparel 

  • Aaron’s AAN
  • Abercrombie & Fitch ANF
  • Advance Auto Parts  AAP
  • American Eagle Outfitters AEO
  • Ascena Retail Group ASNA
  • AutoZone  AZO
  • Barnes & Noble  
  • Barnes & Noble Education  BNED
  • Bed Bath & Beyond BBBY
  • Best Buy  BBY
  • Big Lots  BIG
  • Burlington Stores BURL
  • Caleres CAL
  • Carter’s  CRI
  • Casey’s General Stores  CASY
  • Centric Brands  CTRC
  • Chico’s FAS CHS
  • Columbia Sportswear COLM
  • Deckers Outdoor DECK
  • Designer Brands DBI
  • Dick’s Sporting Goods DKS
  • Dollar General  DG
  • Dollar Tree DLTR
  • Express EXPR
  • Floor & Decor Holdings  FND
  • Foot Locker FL
  • Fossil Group  FOSL
  • GameStop  GME
  • Gap GPS
  • Genesco GCO
  • G-III Apparel Group GIII
  • Guess GES
  • Hanesbrands HBI
  • Home Depot  HD
  • J.Crew Group  
  • L Brands  LB
  • Levi Strauss  LEVI
  • Lowe’s  LOW
  • Michaels  MIK
  • Murphy USA  MUSA
  • Nike  NKE
  • ODP ODP
  • O’Reilly Automotive ORLY
  • Party City Holdco PRTY
  • PVH PVH
  • Ralph Lauren  RL
  • Rent-A-Center RCII
  • RH  RH
  • Ross Stores ROST
  • Sally Beauty Holdings SBH
  • Skechers U.S.A. SKX
  • Tailored Brands TLRD
  • Tapestry  TPR
  • Tiffany TIF
  • TJX TJX
  • Tractor Supply  TSCO
  • TravelCenters of America  TA
  • Ulta Beauty ULTA
  • Under Armour  UAA
  • Urban Outfitters  URBN
  • VF  VFC
  • Williams-Sonoma WSM
  • Wolverine World Wide  WWW

The retail industry is continuing its downwards spiral, as all brick and mortar has been for a long time. COVID certainly has accelerated its demise, however.  For an industry whose largest costs were manufacturing, human resources and rent, while its primary income was in-person impulse sales–this is a very tough time to be in retail.  There are a few companies buried in here that may do extremely well either via online sales channels, memberships/clubs/loyalty programs or because they fall into sectors that may have different types of customers (Autozone, O’Reilly Automotive and Advance Auto Parts for instance).

Home improvement companies like Home Depot and Lowes may also see less of an issue as more and more people opt for DIY improvements to their homes during the lockdowns.

Entertainment

  • Activision Blizzard ATVI
  • AMC Networks  AMCX
  • Cinemark Holdings CNK
  • Discovery DISCA
  • Electronic Arts EA
  • Fox FOXA
  • Gray Television GTN
  • iHeartMedia IHRT
  • Liberty Media LSXMA
  • Live Nation Entertainment LYV
  • Netflix NFLX
  • Nexstar Media Group NXST
  • Sinclair Broadcast Group  SBGI
  • Take-Two Interactive Software TTWO
  • TEGNA TGNA
  • Univision Communications  
  • ViacomCBS VIAC
  • Walt Disney DIS
  • Warner Music Group  WMG

There are two types of entertainment groups–the online/television/media/video game companies and the brick and mortar in-face entertainment companies like Live Nation Entertainment.  Clearly there are going to be huge disparities between companies who require an in-person crowd and companies who do not care where people are located because they are a subscription or ad-based model. Therefore, there will likely be some big winners and some big losers in this cohort.

Internet Services and Retailing and Advertising, Marketing

  • Activision Blizzard ATVI
  • Akamai Technologies AKAM
  • Alphabet  GOOGL
  • Amazon.com  AMZN
  • AMC Networks  AMCX
  • Booking Holdings  BKNG
  • Chewy CHWY
  • Cinemark Holdings CNK
  • Clear Channel Outdoor Holdings  CCO
  • Discovery DISCA
  • eBay  EBAY
  • Electronic Arts EA
  • Expedia Group EXPE
  • Facebook  FB
  • Fox FOXA
  • GoDaddy GDDY
  • Gray Television GTN
  • Groupon GRPN
  • IAC/InterActiveCorp IAC
  • iHeartMedia IHRT
  • Interpublic Group IPG
  • Liberty Media LSXMA
  • Live Nation Entertainment LYV
  • Lyft  LYFT
  • Netflix NFLX
  • Nexstar Media Group NXST
  • Omnicom Group OMC
  • Qurate Retail QRTEA
  • Sabre SABR
  • Sinclair Broadcast Group  SBGI
  • Take-Two Interactive Software TTWO
  • TEGNA TGNA
  • Twitter TWTR
  • Uber Technologies UBER
  • Univision Communications  
  • ViacomCBS VIAC
  • Walt Disney DIS
  • Warner Music Group  WMG
  • Wayfair W
  • Zillow Group  ZG

One would think that because people are staying at home that online advertising companies like Alphabet (Google) would be rolling in cash during the pandemic, but we are seeing a noticeable decline in online ad spend, likely due to the decline in retail and travel industries.  This apparently will account to somewhere between 5-6% of Google’s advertising income.  That is bad, but definitely not the death of Google. Other companies may have very different outcomes depending on how their constituency evolves in the coming months.  Also, depending on how much disposable income is available to the buyers of the products and services of companies, that tend to require a disposable income to survive.

Motor Vehicles and Parts, Automotive Retailing, Services

  • Allison Transmission Holdings ALSN
  • American Axle & Manufacturing AXL
  • Asbury Automotive Group ABG
  • Autoliv ALV
  • AutoNation  AN
  • Avis Budget Group CAR
  • BorgWarner  BWA
  • Camping World Holdings  CWH
  • CarMax  KMX
  • Carvana CVNA
  • Cooper Tire & Rubber  CTB
  • Cooper-Standard Holdings  CPS
  • Copart  CPRT
  • Dana  DAN
  • Ford Motor  F
  • Garrett Motion  GTX
  • General Motors  GM
  • Goodyear Tire & Rubber  GT
  • Group 1 Automotive  GPI
  • Hertz Global Holdings HTZ
  • LCI Industries  LCII
  • Lear  LEA
  • Lithia Motors LAD
  • Meritor MTOR
  • Modine Manufacturing  MOD
  • Penske Automotive Group PAG
  • REV Group REVG
  • Rush Enterprises  RUSHB
  • Sonic Automotive  SAH
  • Tenneco TEN
  • Tesla TSLA
  • Thor Industries THO
  • Visteon VC
  • Wabash National WNC
  • WABCO Holdings  

It would seem like no one is driving right now but in fact the roads in many parts of the United States are just as congested or nearly as congested as always.  But even as people commute to work, or do short stints to shop, they aren’t driving as much for pleasure/leisure.  Many people have decided to sell their cars and many rental companies are going to be in dire straits due to very infrequent business travel.

However, as cars get back on the road there will be issues with engines due to lack of usage (e.g., batteries) as well as tire issues due to not having been driven enough. This will mean a massive increase in need for companies that provide maintenance services, as well as a glut of cars on the market as people divest themselves of cars they cannot afford to keep/maintain.

Airlines

  • American Airlines Group AAL
  • Delta Air Lines DAL
  • Hawaiian Holdings HA
  • JetBlue Airways JBLU
  • SkyWest SKYW
  • Southwest Airlines  LUV
  • Spirit Airlines SAVE
  • United Airlines Holdings  UAL

One of the hardest hit sectors will be airlines.  We have already started seeing mass layoffs and talk of bankruptcy across the board. There is no indication that business travel due to conferences, or in-person meetings have a strong chance of rebounding by the end of the year.  It seems companies largely prefer to do online sales during the pandemic so the antiquated enterprise sales process, which lends itself heavily to travel will likely not recover in the near future.

Mining, Crude-Oil Production and Oil and Gas Equipment, Services

  • Antero Resources  AR
  • Apache  APA
  • Arch Resources  ARCH
  • Baker Hughes  BKR
  • Cabot Oil & Gas COG
  • California Resources  CRC
  • Chesapeake Energy CHKAQ
  • Cimarex Energy  XEC
  • Concho Resources  CXO
  • ConocoPhillips  COP
  • Continental Resources CLR
  • Contura Energy  CTRA
  • CrossAmerica Partners CAPL
  • Devon Energy  DVN
  • Diamondback Energy  FANG
  • EOG Resources EOG
  • Halliburton HAL
  • Helmerich & Payne HP
  • Hess  HES
  • Liberty Oilfield Services LBRT
  • Marathon Oil  MRO
  • MRC Global  MRC
  • Murphy Oil  MUR
  • National Oilwell Varco  NOV
  • Newmont NEM
  • Noble Energy  NBL
  • NOW DNOW
  • Oasis Petroleum OAS
  • Occidental Petroleum  OXY
  • Oceaneering International OII
  • Ovintiv OVV
  • Patterson-UTI Energy  PTEN
  • Peabody Energy  BTU
  • Pioneer Natural Resources PXD
  • ProPetro Holding  PUMP
  • Range Resources RRC
  • Southwestern Energy SWN
  • Sprague Resources SRLP
  • WPX Energy  WPX

The Oil and Gas industry is getting hit from two directions at once. First, oil prices are down due to a massive decrease in price per barrel, and also there are fewer cars on the road due to the lockdowns. However, the energy market still seems to be relatively strong, likely due to the fact that people are having to run air conditioners during the summer heat, and keep computers whirring while they work from their home offices, and ovens running to provide more meals than they would otherwise.

Food Services, Wholesalers: Food and Grocery

  • Bloomin’ Brands BLMN
  • Brinker International EAT
  • Cheesecake Factory  CAKE
  • Chipotle Mexican Grill  CMG
  • Core-Mark Holding CORE
  • Cracker Barrel Old Country Store  CBRL
  • Darden Restaurants  DRI
  • Domino’s Pizza  DPZ
  • McDonald’s  MCD
  • Performance Food Group  PFGC
  • SpartanNash SPTN
  • Starbucks SBUX
  • Sysco SYY
  • Texas Roadhouse TXRH
  • United Natural Foods  UNFI
  • US Foods Holding  USFD
  • Yum Brands  YUM
  • Yum China Holdings  YUMC

Companies that provide food for retail, and restaurants are likely to be extremely hard hit. While there are some food delivery options, almost universally companies who provide food are extremely hard hit.  Which means that companies that provide services to said companies are likely going to be similarly hard hit. Some companies may continue to do well because they provide the bulk of food to certain urban food-islands, but almost universally this sector will continue to be hurt until pandemic restrictions are lifted.

Hotels, Casinos, Resorts

  • Boyd Gaming BYD
  • Caesars Entertainment CZR
  • Eldorado Resorts  ERI
  • Hilton Worldwide Holdings HLT
  • Hyatt Hotels  H
  • Las Vegas Sands LVS
  • Marriott International  MAR
  • Marriott Vacations Worldwide  VAC
  • MGM Resorts International MGM
  • Penn National Gaming  PENN
  • Scientific Games  SGMS
  • Vail Resorts  MTN
  • Wyndham Destinations  WYND
  • Wyndham Hotels & Resorts  WH
  • Wynn Resorts  WYNN

The chances of an average person going to a hotel during a pandemic is greatly decreased, as is the chances of an average business traveler.  Therefore, both vacation/resort travel as well as corporate travel destinations are likely to be hurt deeply during the pandemic.  It should be expected that this industry may rebound as restrictions loosen, but the general fear of travel and sanitation will likely haunt this sector for some time.

Real Estate

  • AGNC Investment AGNC
  • American Tower  AMT
  • AvalonBay Communities AVB
  • Boston Properties BXP
  • CBRE Group  CBRE
  • Colony Capital  CLNY
  • Crown Castle International  CCI
  • Digital Realty Trust  DLR
  • Equinix EQIX
  • Equity Residential  EQR
  • Healthpeak Properties PEAK
  • Host Hotels & Resorts HST
  • Jones Lang LaSalle  JLL
  • New Residential Investment  NRZ
  • Newmark Group NMRK
  • Park Hotels & Resorts PK
  • Prologis  PLD
  • Public Storage  PSA
  • Realogy Holdings  RLGY
  • SBA Communications  SBAC
  • Service Properties Trust  SVC
  • Simon Property Group  SPG
  • Ventas  VTR
  • Welltower WELL

The real estate industry is split into two.  Home prices are increasing as people choose to buy instead of rent during the pandemic and yet, commercial real estate is practically a bankrupt industry.  In particular, companies like CBRE, American Tower, and Simon that are focused heavily on commercial real estate investments will likely be especially hurt due to issues mass protests/rioting and COVID fears and regulations alike.

Breakdown

The breakdown of companies by industry within the Fortune 1000 that comprise any one of these industries is staggering. A grand total of 234 companies within the Fortune 1000 fall into the big movers list.  That’s just shy of 1/4th of all companies will be greatly impacted by COVID.  Here’s the breakdown by sector:

Sector Count within Fortune 1000 Count of Vulnerable Companies
within Fortune 1000
Utilities: Gas and Electric 33
Commercial Banks 31
Industrial Machinery 29
Specialty Retailers: Other 29 29
Chemicals 27
Mining, Crude-Oil Production 27 27
Insurance: Property and Casualty (Stock) 26
Semiconductors and Other Electronic Components 26
Real estate 24
Aerospace & Defense 22
Insurance: Life, Health (stock) 22
Motor Vehicles & Parts 22 22
Securities 22
Wholesalers: Diversified 22
Entertainment 19 19
Computer Software 18
Diversified Financials 18
Food Consumer Products 18
Internet Services and Retailing 18 18
Medical Products and Equipment 18
Specialty Retailers: Apparel 18 18
Financial Data Services 17
Apparel 16 16
Engineering, Construction 16
Information Technology Services 16
Pharmaceuticals 16
Diversified Outsourcing Services 15
Hotels, Casinos, Resorts 15 15
Homebuilders 14
Metals 14
Packaging, Containers 14
Pipelines 14
Scientific,Photographic and Control Equipment 14
Automotive Retailing, Services 13 13
Building Materials, Glass 13
Electronics, Electrical Equip. 13
Health Care: Pharmacy and Other Services 13
Household and Personal Products 13
Food Services 12 12
Oil and Gas Equipment, Services 12 12
Computers, Office Equipment 11
Health Care: Medical Facilities 11
Network and Other Communications Equipment 11
Petroleum Refining 11 11
Telecommunications 11
Energy 10 10
Food & Drug Stores 10
General Merchandisers 10
Home Equipment, Furnishings 10
Insurance: Life, Health (Mutual) 10
Airlines 9 9
Food Production 9
Insurance: Property and Casualty (Mutual) 9
Trucking, Truck Leasing 9
Construction and Farm Machinery 8
Beverages 7
Health Care: Insurance and Managed Care 7
Transportation and Logistics 7
Wholesalers: Electronics and Office Equipment 7
Publishing, Printing 6
Wholesalers: Food and Grocery 6
Wholesalers: Health Care 6
Miscellaneous 5
Temporary Help 5
Transportation Equipment 5
Forest and Paper Products 4
Railroads 4
Waste Management 4
Advertising, marketing 3 3
Education 3
Equipment Leasing 3
Tobacco 3
Mail, Package, and Freight Delivery 2
Shipping 2
Toys, Sporting Goods 2
Mining 1  
Total 1000 234

Within this data there are a lot of unknowns.  For instance:

  • Will drug manufacturers be impacted because people aren’t going into see the doctor anymore?
  • Will home improvement pick up significantly or will COVID keep DIYers at home?
  • How will financials be impacted when there is significantly less spending and less consumer liquidity?
  • How is insurance shaping up? We have seen a great increase in spending for estate planning and life insurance, but what about other forms of insurance?
  • How will specialty foods companies do (e.g., Modelez International)?
  • How will holding companies with a wide variety of holdings handle one bad investment in the short term compared to a entire portfolio of investments that are in peril?
  • Will commercial power usage be offset by home power usage?
  • Will logistics and transportation companies be net neutral (e.g., C.H. Robinson)?
  • Will companies be using this year to bury their losses into one fiscal year, leverage the year to right-size their employee count and treat it as a uniform down year to come out sprinting in FY2021?
  • This also doesn’t account for potential rebounds so long-term viability isn’t easily predictable.  Will there be massive consolidation that creates even larger companies?
  • Not all of these companies are public like Barnes & Noble for instance. So how they are impacted will likely be different than a public traded company may be, in terms of market sentiment and their ability to raise money in the public markets vs actual sales. This could also stymie planned IPOs as well.

This was an interesting exercise. We only pulled together the Fortune 500 for the Bit Discovery reports (you can download them here), but if you are interested in inventory data for the remainder, please let us know.  All of this is speculation and many companies may have a lot more going on than meets the eye.  So please take this all with a grain of salt. Said another way, most importantly, I could painfully, be totally wrong.