Barron’s Weekend Summary: The top 25 chief executives in the US have focused on crisis management this year; A list of the 100 most sustainable companies
* Cover story: Barron’s list of the top 25 chief executives; This year, when the main job of CEOs went from capital allocation to crisis management because of the coronavirus, Barron’s considered corporate leaders’ preparedness as a key factor in creating the list.
• GE’s Larry Culp cut costs and repaid debt, helping the company deal with the global pandemic and economic crisis. • Despite a big stock run and stunning top-line growth, ZM chef Eric Yuan sees huge opportunities.
• GILD chairman and chief executive Daniel O’Day has moved aggressively to test and distribute Covid-19 treatment remdesivir.
• REGN co-founder and chief Leonard Schleifer is leading a major effort to get a drug for Covid-19 into clinical trials.
• BLK chief Laurence Fink is helping the Fed manage its bond buying, and hasn’t been afraid to take a social stand based on his belief that companies should have a purpose.
• CMG chief Brian Niccol has returned the once-troubled food chain to industry-leading performance by instilling focus and discipline on his team.
• TSLA chief Elon Musk is forging ahead with innovation in two industries, electric vehicles and batteries.
• MSFT chief Satya Nadella oversaw a major push into the cloud, and the pandemic has only increased demand for Microsoft’s services.
• NVDA’s Jensen Huang offered scientists free licenses to the company’s genomics-computing platform.
• BAC chief Brian Moynihan has kept workers on the job, and pledged big bucks to tackle inequality.
• AAPL’s Tim Cook has succeeded in diversifying the tech giant’s business, and warned early of the pandemic’s impact.
• WMT chief Doug McMillon has sought to remain competitive by investing in hiring, pay hikes, and omnichannel retailing.
• Jeff Bezos of AMZN responded to the pandemic by hiring 175,000 more people as he sought to navigate the online-shopping surge.
• GM chief Mary Barra retooled the auto giant and has kept it in the black through the current crisis.
• LOW chief Marvin Ellison has worked to close the technology, efficiency, and performance gap with his former employer, HD.
• After building a cancer-drug franchise, MRK chief Kenneth Frazier is now focusing the pharma giant’s efforts on Covid-19.
• Tricia Griffith of PGR, long viewed as the best-managed major auto insurer in the US, moved quickly to help employees and customers during the pandemic.
• NFLX chief Reed Hastings got a boost as people staying home with more time than usual for watching movies and shows found fresh content on the streaming service.
• SHOP’s Tobias Lütke is helping keep small businesses afloat with his e-commerce platform.
• NDAQ chief Adena Friedman led the exchange’s seamless transition to remove operation during the pandemic.
• The remaining five CEOs on the list are Douglas Baker of ECL, Jamie Dimon of JPM, Craig Jelinek of COST, Larry Merlo of CVS, and Mark Zuckerberg of FB.
* Tech Trader: The success of AAPL’s virtual worldwide developer conference—which columnist Eric Savitz says was better than previous live versions—foreshadows larger issues for the sprawling corporate event business, which has taken a hit from the Covid-19 pandemic; While remote events may grow in popularity, the stakes are too high to give up on live events altogether.
* Trader: “The selloff in banks isn’t good for the stock market. The tech sector now makes up about 27 percent of the S&P 500 and is approaching levels of concentration last seen during the dot-com bubble”—but those shares can’t keep going up forever.
* Features: 1) Barron’s list of the 100 Most Sustainable Companies is based on 28 ESG categories covering a blend of 230 indicators; Given all the challenges of 2020, Barron’s decided to create its regular list, then re-rank the companies based solely on “softer” social factors to create two model portfolios—one is an overall sustainability ranking, topped by A, the other is a social metrics ranking, topped by VFC; 2) Positive on BBY, NVDA, VZ: These three corporations place a high value on so-called human capital—including workforce composition, gender, ethnicity, etc.— a subset of the “S” in ESG investing that is rapidly emerging as a key factor in sustainable investing; 3) Despite a proliferation in ESG mutual and exchange-traded funds—from fewer than 200 in 2018 to over 550 today—social principles have gotten far less representation in portfolios than environmental and governance issues; Jeff Gitterman, a co-founding partner at Gitterman Wealth Management, shares insights into how to build a strong social-focused ESG portfolio; 4) Decades of research, not to mention investment performance, have slowly eroded the idea that it was impossible to reconcile personal values with a successful investment portfolio, but never before has there been such a uniform emphasis on companies doing right by all of their stakeholders; 5) As the Covid-19 pandemic continues to wreak havoc, stocks that were hot at the start of it, such as ZM, ETSY, and PTON, are rising while RCL, UAL, and other travel stocks fall, posing a challenge for investors who had started focusing on 2021 earnings expectations as the next performance-driver for stocks; 6) Positive on DELL: The company’s shares have looked temping since they went public in 2018, primarily because of its 81 percent stake in VMW, which is worth more than Dell itself; a spinoff should lead to more upside for Dell shares, but that can’t happen until next year because of tax reasons, so investors will have to be patient.
* Streetwise: NVDA chief Jensen Huang says the company’s deal with Mercedes Benz is transformative—Nvidia has gone from hardware for videogames, to hardware and software for AI, to hardware, software, and services for cars, which makes it a platform company, not just a chip maker.