US STOCK investors are finding the value of staying close to home. Even as the US economy barely grew in early 2014, companies with a domestic orientation have on balance delivered better first-quarter sales and profit growth than their globally oriented peers.
RBC Capital Markets found that sales growth among companies with a high percentage of their revenue coming from the US was three times stronger than those with a bigger international sales mix. Earnings growth was six times as robust. US-focused names had bigger upside surprises on both the top and the bottom lines.
Companies with US-oriented revenue rank among the year’s leading advancers in the S&P 100 Index. Anadarko Petroleum, which gets more than three-quarters of its revenue from the US market, is up nearly 27 per cent in 2014. In its latest quarter, the company’s revenue grew 50.1 per cent, representing an upside surprise of almost 50 percent compared with expectations.
The week ahead will feature earnings from several companies representing both the domestic-leaning and international camps.
Applied Materials, which gets about 80 per cent of its revenue from abroad, will report results this week. Analysts expect the company to post revenue growth of 19 per cent. Deere & Co, which gets 63 per cent of its sales domestically, is set to report earnings on Wednesday, while Wal-Mart Stores, which gets 71 per cent of its revenue from the United States, is due to post results on Thursday.