Running With (and Ahead of) the Big Boys

Rudy Martin

First, thank you for tearing yourself away from the NCAA basketball tournament long enough to read this.

And in the event I don’t win the Quicken Loans billion-dollar "brackets" contest, I truly hope the jackpot goes to one of you — even if it means I have one less reader.

One thing that’s easy to overlook in all the March Madness excitement is that there are two NCAA tourneys — a hoops series for men and a separate set of round-ball games for women.

In the just-ended Winter Olympics, except for pairs skating, virtually every event had separate men’s and women’s divisions.

In the U.S. there is a men’s professional soccer league and separate women’s league. The same is true in tennis, golf, pro basketball and most other sports.

But in the world’s most-competitive sport, it’s a free for all … and it’s exciting to watch. That’s because, unlike sports, it’s legal and even smart to bet on the winners emerging from this impressive group of competitors!

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The Most Competitive ‘Sport’ Is Now

Coed — And It’s All For the Better

In the world’s most-competitive "sport" — business — there are no gender-specific leagues.

So as the number of Big Dance participants get trimmed over the next few days to the Sweet Sixteen, you can consider this list of 16 successful major worldwide corporations with female CEOs.

16 Strong Companies

with Female CEOs at the Helm 

The list includes domestic and international corporations listed on major U.S. stock exchanges with female CEOs and with market caps of at least $10 billion.

(This market cap threshold unfortunately eliminated Avon Products (AVP) led by Sheri McCoy.)

The Ultimate Judge of Success

I made this list to see how the ultimate arbiter of corporate success, the stock market, judges the growing number of major corporations led by women CEOs.

The conclusion of this limited study was, as I fully expected …

The stock market evaluates CEO performance in a gender-neutral way, at least for this example of modest statistical significance.

Running With (and Ahead of) the Big Boys

Ten of the 16 stocks on the list beat the S&P 500’s 20.3% total return over the past year (as of March 14), with the 23.3% equal-weighted average return for the group surpassing the benchmark’s 20.3%.

Even though the group’s three-month average gain of 3.3% trailed the S&P by a percentage point, nine of the firms still outpaced the index over that period.

Knocking the ball out of the park with a stock market return of 80.9% over the past year was Lockheed Martin Corp. (LMT), led by Marillyn Hewson.

Also in the rough-and-tumble defense sector, General Dynamics Corp. (GD), guided by Phebe Novakovic, vaulted 57.7% in the most recent year.

Not Everything’s Coming Up

Roses for These Companies

Dragging the group’s average lower were consistent and dramatically negative stock-market returns for Petroleo Brasileiro SA Petrobras (PBR), led by CEO Maria das Gracas Silva Foster.

Consistently negative returns resulted in a 39.6% dive for PBR over the past year. But in all fairness to Petrobras’ CEO, it was a different female chief executive who should arguably take much of the blame for the dismal performance of this international energy giant.

Brazil’s government, led by populist president Dilma Rouseff, mandated that government-controlled Petrobras keep voters happy by selling much of its output domestically at below cost — not a way to make a profit and keep investors happy.

Recent difficulties with faulty ignition assemblies at General Motors (GM), now guided by new CEO Mary Barra, have driven the firm’s shares sharply lower recently.

In this sample of 16 large, international corporations, we see that leadership gender had, on average, no negative impact on stock performance.

Gender Gap Less Apparent in Leadership,

More Prominent in Overall Workforce

Another important overall investment consideration leaps to the forefront as well …

Any nation that — for cultural, educational or policy reasons — discourages women from performing work appropriate to their skills and ambition is grossly underutilizing a key natural resource: half its population!

Even though 13 of the 16 companies in the table are U.S.-domiciled — the exceptions being Petrobras, Australian financial giant Westpac Banking Corp (WBK) and Indian financial firm ICICI Bank Ltd (IBN) — the U.S. ranks a mediocre 23rd of 136 nations in the most recent Global Gender Gap report from the World Economic Forum.

As you can see in the next table, some major Asian nations can potentially boost their economic potential by integrating the female half of their respective populaces into the workplace with equal status.

I alluded to the gender issue in my Feb. 14 column on Asia ETFs. I noted that despite that nation’s 111th ranking in gender equality, Korean women — and investors! — have some reason for hope.

The nation’s first female president, Park Geun, is taking steps to increase the female employment rate from its current 53.5% of the nation’s employment-age women to a 61.9% goal.

Data models I use for investment research have me covering all the stocks we’ve looked at today. Throughout the past several years, many of these companies have appeared in my Global Trend Trader buy list.

Bottom line: The gender of the CEO has never been a consideration in my stock-picking process; nor should it be for any serious individual or institutional investor.

So, what’s the lesson here?

The most promising territories for investment gains are areas where human capital is used to its full potential.

This means people of both genders (as well as all cultures, religions, skin colors, nations of birth and all other factors extraneous to productivity) can participate to their full potentials.

That, in turn, can ignite long-term trends that elevate economies to bracket-beating gains.

Happy Trading!

Rudy

P.S. Hungry for more winners? Here’s my list of Bronze, Silver & Gold stock contenders for 2014. These 3 stocks still look like champs when it comes to dividends and growth!

P.P.S. Tony Sagami has uncovered a company with a gas deposit larger than Australia’s GDP. Get the details on this “Dollar Dynamo” in his brand-new video presentation. Click this link to view it now.

Your thoughts on “Running With (and Ahead of) the Big Boys”

  1. Your study doesn’t factor in the damage done to a society where moms with children under 18 yrs are pressured and convinced that they need to go to work in order to ‘make ends meet’. Both women and men who aren’t ready for marriage should certainly be encouraged to succeed in a career before they are ready to marry. But the primary purpose of marriage is to have children. And when women are at that point, one parent should devote full time to the kids. Pushing them over to day “care” or babysitters or even grandparents breaks down the vital bond between parent and child. A society which does this becomes dysfunctional, reflecting the families. If these CEOs haven’t neglected their kids at the expense of their careers OR if their husbands are able to devote full time to their underage kids, then fine, no harm done.

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