AN INDEX OF ITS OWN…

It's not unusual for Wall Street to track industries as a whole and to follow the way the companies involved influence each other, but never before has it pegged such an index to a single company and the way its suppliers perform. Last week International Securities Exchange Holdings Inc. and Revere Data LLC launched such an index solely for companies that do business with the Bentonvile Behemoth. From the Springdale, Arkansas, Morning News: Patricia Edwards, fund manager for Wentworth, Hauser and Violich in Seattle, and retail analyst Don Gher of Coldstream Capital Management, said they were not aware of another investor index this specialized. "Wal-Mart is so big and accounts for so much of U.S. retail that it makes sense in a way," Edwards said. She said the index could prove helpful to analysts also as they often discuss with each other the percentage of sales a company has with Wal-Mart. Gher said he wasn't familiar enough with the new index to know how much it would help investors but noted that "it would be something very targeted." "From what I've heard, the problem with Wal-Mart is trying to track some of the various components of (its) sales. This (index) might give you another way of slicing and dicing sales. It could be interesting," he said. The top 10 publicly held companies in the index are: * Handleman Co. (sells prerecorded music to most major retailers) -- 74 percent * Cott Corp. (USA; sells retailer-branded soft drinks) -- 40 percent * Chattem Inc. (drug and chemical company) -- 34 percent * CNS Inc. (producer of Breathe Right nasal strip and other consumer products) -- 31 percent * Cal-Maine Foods Inc. -- 30.9 percent * Del Monte Foods Co. -- 29 percent * Playtex Products Inc. -- 28 percent * LeapFrog Enterprises Inc. (learning-based toys and games) -- 28 percent * Iconix Brand Group Inc. (licenses Joe Boxer, Mudd and other fashion brands) -- 27.7 percent * The Clorox Co. -- 27 percent. I'm happy to note that I don't see any toothpaste companies on the list. Jeff Hess: Have Coffee Will Write.

2 Responses to “AN INDEX OF ITS OWN…”

  1. Peter Sayles says:

    So basically the index tells you which companies are under the thumb of Wal-Mart. It’s likely that any of those companies would go bankrupt if Wal-Mart stopped doing business with them. Does that have something to do with a monopsony?

  2. Jeff Hess says:

    Shalom Peter,

    That would be the word.

    B’shalom,

    Jeff

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