International Revenue Exposure

In recent years investors have placed an added emphasis on the percentage of revenues that a stock derives domestically versus outside of the US.  Bespoke was one of the first research shops to really focus on this stock characteristic, and it is now one of the most important yet hard to find data points because of its impact on performance.  When the US dollar is declining, it provides an added benefit to companies that generate a large portion of sales outside of the US.  When the dollar is rallying, these large international companies lose out, while companies that generate most or all of their sales inside the US benefit.

In 2009, 33.7% of S&P 500 stocks generated all of their revenues inside the US, while 25% generated more than 50% of their revenues outside of the US.  As noted earlier, the dollar is up 3.82% this year, and domestic companies have benefited.  The stocks with 100% domestic revenues are up an average of 8.03% year to date, while stocks with >50% international sales are up an average of 5.22%.

Knowing the geographical revenue numbers of a company is extremely helpful if you’re trying to gain international exposure by owning US stocks or trying to benefit from moves in the US dollar currency.  If you want to play a dollar rally, stick with domestics, and vice versa for a dollar decline.  We recently finished compiling the 2009 revenue exposure numbers for the Russell 1,000 and S&P 500 and put it all into the Bespoke Interactive International Revenues Database.  In the database, you can easily find out the revenue exposure for individual stocks as well as screen for the stocks with the most international or domestic exposure.  To receive access to this database, you have to be a yearly subscriber to the Bespoke Premium or Premium Plus service.  Please click here to subscribe today.

Comments

[steveforever]

We are at the 2010 end.
Markets are changing quickly.
May be 2009 data are a bit old.