With a housing slump and credit crunch haunting the U.S. economy, many promising organizations are those that do a significant global trade—especially in China and India. Here are some companies that illustrate how the economy may play out in the rest of 2008.
Baron Funds
If the U.S. is heading into a recession or something close to it, what kind of mutual funds may attract investors? Those that invest in mid-sized or smaller growth companies, which are not necessarily linked to either daily stock indexes or trendy market segments. One company that has focused on these kinds of value investments is Baron Funds.
Caterpillar
Caterpillar manufactures construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Analysts expect high demand particularly in overseas markets of these kinds of products as less developed economies continue to build up their infrastructure. The company is looking for sales to China to triple by 2010, according to media reports.
Countrywide Financial Corp.
The effects from the subprime mortgage chaos are being felt in the real estate, mortgage and housing industries. One company that has become a symbol for the housing slump and credit crunch is Countrywide. It planned to slash its workforce by 20% as mortgage-origination volume plunged. Media reports suggest that Countrywide will focus on conventional mortgages, which tend to be less profitable than riskier types of loans.
General Electric
Because of its diverse products and strength in global trade, GE is another company to watch in 2008. Products that relate to infrastructure building and aerospace may do particularly well in foreign markets. Strong sales overseas could offset GE’s products and services hurt by the downturn in the U.S. housing market.
Google, Inc.
Google continues to be profitable as online advertising increases. Recent acquisitions such as YouTube may help the company to further expand in 2008.
News Corporation
With the recent acquisition of Dow Jones (including The Wall Street Journal) and the launch of Fox Business Channel in 2007, Chairman Rupert Murdoch will gain even greater influence as a media mogul. Watch for possible new approaches for the delivery of business news especially since the company owns MySpace.
Siemens AG
Siemens AG, headquartered in Germany, is one of the world’s largest electrical engineering and electronics companies. Operations are expected to be divided into three segments—health care, automation and infrastructure, and energy—as part of a restructuring plan, according to media reports. The new approach is expected to make the company more economical and better able to compete in global markets.
