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Over the last 12 weeks, the market has taken a dreadful downturn. The Dow Jones Industrial Average has dropped 14% from 12,657 on July 8 to 10,913 this past Friday. The S&P 500 has also dropped about 16% from 1,344 on July 8 to 1,131 this past Friday. The SPDR S&P 500 Trust ETF (NYSEARCA:SPY) had a decline of 16% as expected.

However, as one would expect, these declines have not been consistent across all industries. It could be easily argued that the last twelve weeks have seen a large shift in views of the likelihood of another downturn with slower growth. Defensive industries have obviously held up better, while more macro industries, like mining and oil, have suffered greater declines.

For newer investors, this article will clearly show which industries appear to be more defensive and which ones are more cyclical and will move with the economy. The following table shows a ranking of 100 industries according to the decline in equity values.

12 Week Industry Performance

Industries

Industry aggre-

gate equity value ($ Billions)

Cos.

% change in aggre-

gate market values

Largest

co.

ticker

Largest company
Photography 2.5 8-42.5% SFLY Shutterfly, Inc.
Tires 3.2 3 -41.9% GT Goodyear Tire & Rubber Company (The)
Chemicals: Plastics & Rubber 12.8 12 -40.9% ALB Albemarle Corporation
Coal Mining 58.6 22 -40.6% YZC Yanzhou Coal Mining Company Limited
Iron & Steel 97.0 26 -39.6% PKX Pohang Iron & Steel Co., Ltd.
Printing 6.5 13 -35.9% RRD R.R. Donnelley & Sons Company
Construction - Raw Materials 38.0 17 -35.6% CRH CRH PLC
Metals 416.6 34 -33.4% BHP BHP Billiton Limited
Fabricated: Plastics & Rubber 6.3 13 -32.4% ASH Ashland Inc.
Computer Networking Equipment 10.9 22 -30.3% FFIV F5 Networks, Inc.
Insurance (Life) 246.0 34 -30.2% OTCQX:AZSEY ALLIANZ SE
Construction - Supplies & Fixtures 84.1 47 -30.2% MMM 3M Company
Paper and Pulp 23.0 24 -30.0% OTCQX:SEOAY STORA ENSO CORP
Auto & Truck Parts 72.1 51 -29.9% JCI Johnson Controls, Inc.
Advertising 28.2 35 -29.6% OMC Omnicom Group Inc.
Miscellaneous Capital Goods 157.5 111 -29.6% NOV National-Oilwell, Inc.
Rental & Leasing 27.0 23 -29.3% IX Orix Corp Ads
Oil Well Services & Equipment 322.9 84 -29.0% SLB Schlumberger N.V.
Schools 28.4 49 -28.8% APOL Apollo Group, Inc.
Auto & Truck Manufacturing 336.9 27 -28.5% TM Toyota Motor Corp Ltd Ord
Construction Services 61.4 77 -28.0% FLR Fluor Corporation
Electronic Instruments & Control 303.4 158 -27.7% SI Siemens AG
Trucking 18.1 28 -27.1% JBHT J.B. Hunt Transport Services, Inc.
Construction & Agricultural Equipment 131.2 24 -27.0% CAT Caterpillar, Inc.
Healthcare Facilities 109.4 94 -27.0% FMS Fresenius Medical Care Corporation
Textiles - non apparel 4.2 8 -26.9% MHK Mohawk Industries, Inc.
Hotels & Motels 40.4 20 -26.9% MAR Marriot International
Jewelry 6.3 11 -26.8% FOSL Fossil, Inc.
Office Equipment 18.2 9 -26.3% XRX Xerox Corporation
Forestry & Wood Products 10.3 5 -26.2% WY Weyerhaeuser Company
Water Transportation 24.2 50 -26.2% KEX Kirby Corporation
Computer Storage Devices 81.8 23 -26.1% EMC EMC Corporation
Furniture & Fixtures 14.1 31 -26.1% TPX Tempur-pedic International Inc
Appliance & Tools 35.5 18 -25.5% GWW W.W. Grainger, Inc.
Chemical Manufacturing 395.0 109 -24.5% OTCQX:BASFY BASF AKTIENGESELLSCHAFT
Audio Video Equipment 69.9 27 -24.4% PC Panasonic Corporation
Investment Services 56.5 30 -24.2% PLD ProLogis
Product Fabrication 72.1 59 -23.7% PCP Precision Castparts Corporation
Scientific Instruments 124.6 89 -23.2% EMR Emerson Electric Company
Containers & Packaging 57.7 32 -23.0% IP International Paper Company
Oil Production 996.8 196 -22.7% PTR PetroChina Company Limited
Broadcasting & Cable TV 307.9 55 -22.1% CMCSA Comcast Corporation
Non-metallic mining 57.2 7 -21.9% POT Potash Corporation of Saskatchewan Inc.
Railroads 98.7 11 -21.7% UNP Union Pacific Corporation
Airlines 58.9 24 -21.4% RYAAY Ryanair Holdings plc
Miscellaneous Transportation 31.4 24 -20.9% CHRW C.H. Robinson Worldwide, Inc.
Retail (Technology) 14.4 8 -20.7% BBY Best Buy Co., Inc.
Campers & RV Vehicles 1.9 9 -20.7% THO Thor Industries, Inc.
Air Courriers 88.4 8 -19.5% UPS United Parcel Service, Inc.
Waste Management Services 49.7 36 -19.4% WM Waste Management, Inc.
Personal Services 31.6 29 -19.3% EXPE Expedia, Inc.
Aerospace & Defense 301.1 68 -19.0% UTX United Technologies Corporation
Agriculture Crops 4.9 14 -18.4% CZZ Cosan Limited
Casino & Gaming 72.9 39 -18.1% LVS Las Vegas Sands Corp.
Conglomerate 26.6 7 -18.0% TYC Tyco International, Ltd. (Switzerland)
Communications Equipment 338.7 138 -18.0% CSCO Cisco Systems, Inc.
Security Services and Products 5.5 24 -17.9% DBD Diebold, Incorporated
Real Estate Operations 370.1 184 -17.4% SPG Simon Property Group, Inc.
Semiconductors 497.7 223 -17.4% INTC Intel Corporation
Recreational Activities 37.9 23 -17.3% CCL Carnival Corporation
Business Services 197.6 185 -17.1% ACN Accenture plc.
Retail (Drug Stores) 97.9 14 -17.0% CVS CVS Corporation
Integrated Oil 1,270.0 24 -16.9% XOM Exxon Mobil Corporation
Office Supplies 13.1 9 -16.6% SPLS Staples, Inc.
Insurance (Accident & Health) 161.6 21 -16.5% UNH UnitedHealth Group Incorporated
Health Equipment 326.8 223 -16.2% MDT Medtronic, Inc.
Insurance (Miscellaneous) 46.5 16 -15.7% MMC Marsh & McLennan Companies, Inc.
Publishing 92.5 35 -15.4% NWSA News Corporation
Miscellaneous Financial Services 15.1 54 -14.9% FDS FactSet Research Systems Inc.
Retail (Apparel) 98.9 53 -14.3% COH Coach, Inc.
Software & Programming 784.7 312 -14.2% MSFT Microsoft Corporation
Insurance (Property) 221.7 93 -13.5% ACE Ace Limited
Recreational Products 38.4 44 -13.3% MAT Mattel, Inc.
Gold and Silver Mining 331.6 55 -13.2% RIO Rio Tinto Plc
Retail (Grocery) 109.8 31 -12.7% SYY Sysco Corporation
Motion Pictures 22.2 25 -12.7% DISCA Discovery Communications, Inc
Consumer Financial Services 309.7 34 -12.2% GE General Electric Company
Biotechnology & Drugs 790.1 394 -12.0% SNY Sanofi-Aventis SA
Retail (Furnishings) 85.4 9 -11.4% HD Home Depot, Inc. (The)
Water Utilities 17.0 16 -10.4% SBS Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp
Computer Services 575.0 184 -10.3% IBM International Business Machines Corporation
Major Drugs 708.4 19 -10.0% JNJ Johnson & Johnson
Alcoholic Beverages 257.1 15 -8.8% ABV Companhia de Bebidas das Americas - AmBev
Communications Services 1,465.4 164 -8.7% CHL China Mobile (Hong Kong) Ltd.
Apparel 59.7 51 -8.2% VFC V.F. Corporation
Food Manufacturing 283.2 87 -8.1% OTCQX:DANOY GROUPE DANONE
Retail (Specialty) 170.9 70 -7.9% COST Costco Wholesale Corporation
Natural Gas 289.8 54 -7.8% EPD Enterprise Products Partners L.P.
Footware 53.0 17 -7.2% NKE Nike, Inc.
Fish & Livestock 1.9 5 -7.2% IBA Industrias Bachoco, S.A. de C.V.
Personal & Household Products 342.2 44 -6.5% PG Procter & Gamble Company (The)
Computer Peripherals 67.5 34 -6.2% CAJ Canon, Inc.
Retail (Department) 288.0 16 -5.6% WMT Wal-Mart Stores, Inc.
Restaurants 200.9 66 -5.2% MCD McDonald's Corporation
Non-alcoholic Beverages 331.7 20 -5.0% KO Coca-Cola Company (The)
Tobacco 243.3 9 -4.5% PM Philip Morris International Inc
Electric Utilities 560.7 84 -3.8% SO Southern Company (The)
Retail (Catalogue & Mail Order) 146.1 27 -1.4% AMZN Amazon.com, Inc.
Computer Hardware 447.1 25 -0.2% AAPL Apple Inc.

Source: Data provided by Zacks.com premium services. Industry categories were provided by Edgar-Online. Analysis covered 5,322 companies with an aggregate equity value of $18.5 trillion. There are some non U.S. companies mixed into the groupings and possibly some companies excluded; however, sample size should be sufficiently large to account for any omissions. Furthermore, individual readers may disagree with industry groupings. For example, there is both a Biotech & drugs and Pharmaceuticals - many companies could arguably be grouped in either of these industries.

It is clear that there is a wide range of performance across the different sectors, ranging from Computer Hardware, which had essentially no change, to basic materials industries which all dropped on the order of 40%. However, even simply looking at an industry result can be misleading. The following table shows a deep dive into Computer Hardware which is dominated by Apple (NASDAQ:AAPL).

Computer Hardware Companies

Rank Ticker Current Market Cap ($ millions) % Change Name
1 AAPL 362,094 9.3% Apple Inc.
2 HPQ 49,323 -34.8% Hewlett-Packard Company
3 DELL 28,044 -13.3% Dell Inc.
4 IM 2,617 -10.3% Ingram Micro Inc.
5 TECD 2,077 -9.8% Tech Data Corporation
6 NSIT 715 -16.7% Insight Enterprises, Inc.
7 SMCI 499 -21.3% Super Micro Computer, Inc.
8 SGI 390 -27.0% Silicon Graphics International Corp
9 IN 390 -41.6% UNOVA, Inc.
10 DGII 297 -20.0% Digi International Inc.

Source: Data provided by Zacks.com services.

This table shows that the performance of Computer Hardware was entirely driven by AAPL, which represents about 80% of the market capitalization of the entire industry and happened to have a positive return over this period which was enough to counter all the negative returns, including most notably HPQ, of all the other companies.

Another clear example would be the Restaurant industry which showed just a 5.2% decline. Intuition would tell us that one would expect to see a greater drop in a category that is intuitively viewed as a luxury good, similar to Jewelry which had a 26% drop. However the following table will clear up the perceptions:

Restaurant Industry

Rank Ticker Market Cap ($ millions) % Change Name
1 MCD 91,599 3.2% McDonald's Corporation
2 SBUX 28,479 -5.3% Starbucks Corporation
3 YUM 23,007 -10.9% Yum! Brands, Inc.
4 OTCPK:SDXAY 10,490 -14.0% SODEXHO
5 CMG 9,816 -4.7% Chipotle Mexican Grill, Inc.
6 THI 7,565 -3.5% Tim Hortons Inc.
7 DRI 5,853 -18.9% Darden Restaurants, Inc.
8 PNRA 3,276 -18.4% Panera Bread Company
9 WEN 1,901 -14.1% Wendy's/Arby's Group, Inc.
10 EAT 1,821 -19.2% Brinker International, Inc.
11 DPZ 1,644 4.2% Domino's Pizza Inc
12 CAKE 1,460 -23.9% The Cheesecake Factory Incorporated
13 BJRI 1,240 -18.1% BJ's Restaurants, Inc.
14 BWLD 1,145 -6.5% Buffalo Wild Wings, Inc.
15 TXRH 972 -25.5% Texas Roadhouse, Inc.
16 JACK 950 -12.3% Jack In The Box Inc.
17 CBRL 948 -16.6% Cracker Barrel Old Country Store, Inc.
18 BOBE 895 -18.5% Bob Evans Farms, Inc.
19 PZZA 786 -3.5% Papa John's International, Inc.
20 DIN 737 -28.5% DineEquity, Inc
21 PFCB 636 -32.1% P.F.Chang's China Bistro, Inc.
22 CEC 569 -29.6% CEC Entertainment, Inc.
23 RT 470 -32.2% Ruby Tuesday, Inc.
24 SONC 456 -32.8% Sonic Corp.
25 BH 439 -24.5% Biglari Holdings Inc.

Source: Data provided by Zacks.com services and author calculations.

McDonald's (NYSE:MCD) showed a slight positive return. MCD and Wal-mart Stores, Inc. (NYSE:WMT) were the only two DJIA components to have positive returns in 2008. MCD tends to do reasonably well in most markets. Given changes in society, people dine out more than ever before, so in more challenging times, people reduce the level of dining out which potentially drives more business to MCD, enough to offset MCDs loss of customers from people dining out to not dining out.

So MCD, with almost 50% of the equity value in the industry and a positive return is enough to counter all the other negative returns. Furthermore, it is also possible that restaurants never recovered from the Great Recession to the same level as other companies . However, AAPL and MCD are not alone in being their industry champions. For many industries, the largest company often represented 50+% of the aggregate equity value.

Industry Champions

Industry % of MC for Leader Leader Ticker Leader Name Leader market cap ($ B)
Jewelry 89.7% FOSL Fossil, Inc. 5.6
Forestry & Wood Products 84.0% WY Weyerhaeuser Company 8.7
Computer Peripherals 82.6% CAJ Canon, Inc. 55.8
Computer Hardware 81.0% AAPL Apple Inc. 362.1
Tires 79.2% GT Goodyear Tire & Rubber Company (The) 2.6
Footware 78.8% NKE Nike, Inc. 41.8
Office Supplies 74.8% SPLS Staples, Inc. 9.8
Conglomerate 73.9% TYC Tyco International, Ltd. (Switzerland) 19.6
Textiles - non apparel 73.1% MHK Mohawk Industries, Inc. 3.1
Air Courriers 71.8% UPS United Parcel Service, Inc. 63.4
Campers & RV Vehicles 71.1% THO Thor Industries, Inc. 1.4
Retail (Catalogue & Mail Order) 69.1% AMZN Amazon.com, Inc. 101.0
Non-metallic mining 67.9% POT Potash Corporation of Saskatchewan Inc. 38.9
Retail (Technology) 63.4% BBY Best Buy Co., Inc. 9.1
Retail (Furnishings) 63.0% HD Home Depot, Inc. (The) 53.8
Construction - Supplies & Fixtures 62.9% MMM 3M Company 52.9
Retail (Department) 62.6% WMT Wal-Mart Stores, Inc. 180.3
Photography 61.0% SFLY Shutterfly, Inc. 1.5
Fish & Livestock 59.8% IBA Industrias Bachoco, S.A. de C.V. 1.1
Office Equipment 56.6% XRX Xerox Corporation 10.3
Fabricated: Plastics & Rubber 55.7% ASH Ashland Inc. 3.5
Computer Networking Equipment 55.2% FFIV F5 Networks, Inc. 6.0
Consumer Financial Services 54.3% GE General Electric Company 168.1
Computer Storage Devices 53.8% EMC EMC Corporation 44.0
Recreational Activities 51.4% CCL Carnival Corporation 19.5
Personal & Household Products 51.1% PG Procter & Gamble Company (The) 175.0

Source: Source: Data provided by Zacks.com services and author calculations. Again it is important to note that industry groupings are more finely cut. Cisco Systems, Inc. (NASDAQ:CSCO) is the leader of Communications Equipment, not Computer Networking Equipment, with a market cap of $87 billion, representing about 25.7% of that Industry's equity value. It can also be noted that Tiffany & Co (NYSE: TIF) is a specialty retailer, not a jewelry company.

So what should an investor do with this information?
The answer is largely driven by their macro perspectives and experience levels. For new investors, this provides a very clear illustration of defensive industries and provides several company examples to review further. Even if the stocks have declined only slightly, this might still represent a good area in which to search for bargains.

Tobacco is often viewed as a defensive industry and posted just a 4.5% decline. However, industry leader Phillip Morris International, Inc. (NYSE:PM) had a 7.2% drop in price, but still offers a 4.8% dividend and a strong track record of dividend growth.

Within the Electric Utility industry, many of the U.S. Utilities showed improvements while the industry was dragged down by foreign utilities posting significant declines. Notably, Exelon Corp. (NYSE:EXC) and NextEra Energy, Inc. (NYSE:NEE) posted declines of 1.0% and 6.1% respectively. EXC offers a current dividend yield of 4.8% and NEE has a dividend yield of 4.0%.

For individuals who want to bet on a stronger global recovery from the current anticipated recession, basic materials stocks could lead the way. The biggest returns will be had by the most marginal players if expectations for the economy and commodity prices improve sooner than expected.

However, these are riskier plays and in a prolonged downturn could suffer more. Within Iron & Steel, ArcelorMittal (NYSE:MT) has been battered and is down 52.2%, while mini-mill leader Nucor Corporation (NYSE:NUE) has declined just 21.8%.

It should be noted that this is an industry scan article designed to think about where some opportunities might be. One would have to do substantial research on any company prior to making any investment. In some of my earlier articles, I've looked more closely at NUE (some time ago), MCD, and EXC. I expect to follow up with a closer look at PM which is interesting because of its relatively high dividend yield. I've never looked closely at MT and NEE so there might be some surprises there. MT is comparable in size to industry leader POSCO (NYSE:PKX).

Disclosure: I am long SPY.

Disclaimer: This article is for informational and educational purposes only and shall not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security.

Source: An Industry Scan: Finding Bargains Among The Market Wreckage