We are currently analysing subsets of US listed companies (as they are obliged to file quarterly figures) in terms of sensitivity to an economic downturn as well as other functional characteristics (a.o. whether the subsets are impacted by the pandemic in the same way). Analysing the Q1 financials of comparable companies, the preliminary conclusion is that a large number of the listed comparable companies report large decreases in operating income. For example, subsets active in the heavy machinery industry report an average decrease of operating income of 51,4% and subsets active in the logistics industry report an average decrease of operating income of 28,2% (as compared to Q1 2019). This may trigger a re-evaluation of the search strategies applied, for example focussing on a single year (as the impact of COVID-19 pandemic may be reflected in a limited period of time) and assessing the comparable data. The decrease as depicted in the Q1 figures will be even more significant in the Q2 figures.
Following the filing of the Q2 figures, we will draw our final conclusions and report in a more elaborate blog.
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