The Hoard is Gathering
Last week, we saw other thought leaders and news providers embrace the zombie concept and further investigate the concerns. Liz Ann Sonders shared on Twitter that nearly 2.2 million Americans work at zombie companies.
CNBC also covered the concerns with zombie companies and questioned their ability to raise capital through debt in this environment.
Is the Cure Obvious?
We followed up our original research on zombie companies with a more optimistic view for investors. In our research note, “A Bull Market in Bookshelves,” we looked at investments that not only avoid zombies, but also embrace mega-trends that have been accelerated by the response to COVID-19. Below we looked at the top performing non-leveraged US ETFs, excluding the country-specific funds. The performance certainly appears to coincide with the themes and low infection from zombie companies.
Clearly, the market is awarding the innovators; even IBUY, which has 13% exposure to zombies (primarily online travel agencies), is performing very well because of the trend toward online commerce. The opposite is also true. The worst performers, noted below, are either extremely infected, or focused on oil.
TETF.Index Performance
Returns as of May 22, 2020.
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