It is really difficult to tell how well a company will recover when all of this turmoil begins to die down. Once the storm has passed, the amount of debt a company has will have a lot more trouble bringing themselves back up to where they need to be. A company with a smaller amount of debt will be able to weather the storm a lot better. Once the economy has the opportunity to rise back up, the lack of competition for some companies will be a great opportunity.
Key Takeaways:
- During this economic recession, it will be companies that carry the least amount of debt that will be successful.
- These low-debt companies tend to be the leaders in emerging industries and once the economy recovers, they will be at the top of that industry.
- Some of these low-debt companies include Alibaba, Apple, Microsoft, Fortinet, and Taiwan Semiconductor.
“Since the Great Recession, non-financial business debt has grown by 60% to $16 trillion. When you include debt of financial companies, the total tops $32 trillion. Debt in the hard-pressed energy sector alone amounts to nearly $2 trillion.”