Great Britain’s decision to leave the European Union forced the markets into turmoil, with the S&P 500 down five percentage points from June 23. Investors have definitely been on edge since then, as any investor with a well-diversified global portfolio is likely holding several U.K. and European-based companies. Some of the biggest losers include British financial institutions like Barclays (down 37 percent) and the Royal Bank of Scotland (down 36 percent).
But before you start making rash decisions with your portfolio or jetting off to escape the bleak reality at your favorite vacation spot, understand that it’s not all downhill from here. There have been very few winners in the past couple days of trading, but there are indeed some companies that are not only weathering the storm, but rising despite the decline of global markets.
Some of these companies, like the ones dealing in gold, are to be expected in times of economic uncertainty. Others are a little more surprising. Here are four companies that are dealing with the Brexit better than most.
You can take your pick of stocks on the rise within the gold sector. B2Gold Cop, a Canada-based mining company, is just one of the many. B2Gold rose 10 percent on the news of Great Britain’s vote, as investors typically flock to gold when the future looks uncertain.
Even without the Brexit, B2Gold Corp has been enjoying a stellar 2016 that has seen shared prices rise by 140 percent. Gold production by the company is up by 10 percent this year, but the company is still down from its highs in 2011. If the post-Brexit turmoil continues, you can expect demand for gold to rise.
Mall-based retail outlets aren’t the most popular with investors, and that’s for good reason considered the decline in shopping malls nationwide. Shoe and athletic apparel retailer Finish Line was fortunate to beat earnings expectations at just the right moment. As the rest of the world’s markets were in free fall, Finish Line enjoyed a huge 17 percent rise.
While the timing of the earnings announcement was fortuitous, Finish Line’s long-term future is a little more questionable. The retailer is closing up 150 stores nationwide (a quarter of all their stores) amidst a generally downward trend in sales.
Finish Line’s future is questionable, but Wal-Mart is on rock-solid footing as they always are. Shares are down less than a percent from the Brexit decision, making it one of the best performers on the Dow Jones Index in recent days.
How is Wal-Mart holding so steady? Even though Wal-Mart owns one of the largest supermarket chains in the United Kingdom, they do most of their business in the U.S. and don’t have as much exposure to the economic uncertainty as some other companies.
Furthermore, Wal-Mart does well in economic certainty. It’s a discount retailer, so business stays strong (though not invincible) even in light of layoffs and other economic problems. When the economy is performing strongly, Wal-Mart tends to suffer. It’s the opposite story when the economy is down.
If Wal-Mart a discount retailer, then high-end grocery store Whole Foods is the exact opposite. Whole Foods is up a modest 2 percent since the Brexit. That’s good news for the company that’s trying to regain its footing after some stern words from U.S. regulators about the condition one of their plants and a decline in share value.
Like Wal-Mart, Whole Foods also has exposure to the United Kingdom but does most of its business in the U.S. There are only a handful of stores in the U.K., so Whole Foods remains largely isolated from the chaos over there.
That’s true for the time being, but could change if the rest of the world seriously begins to suffer. Whole Foods suffered a large decline in sales during the economic recession in the previous decade, as penny-pinching customers opted for more affordable options.
Right now it’s way too early to tell what kind of long-term impact the Brexit will have on the above companies. Right now, it’s especially hard to find companies that aren’t dropping too precipitously. There are, however, some companies out there worth taking a look at as the world markets decline.