There has been lots of hand-wringing about public sector (i.e., gov’t) vs. private sector (non-gov’t), in terms of recessionary recovery. But here’s an interesting twist, which removes the government option: Publicly-traded companies are outperforming privately-held companies, in terms of annual sales.
That’s the finding of Sageworks, a Raleigh-based provider of private company financial analytics.
The firm reports that publicly-traded companies have seen 2.64% annual sales growth so far in 2010, compared to a 4.67% decrease for privately-held companies. Both types of companies reported lower sales in 2009, although privately-held fared far worse (5.8% loss compared to a 1.19% loss for publicly-traded).
The last time both types of companies reported sale increases was 2008, when privately-held (3.73%) outpaced publicly-held (2.09%).
I had assumed that SageWorks had a theory to explain the reversal, but you know what they say about those who assume…
Instead, SageWorks principal Jay Borkowski said that his firm simply runs the fundamentals, without doing any subjective work (i.e., the “why”). Seems SageWorks wanted to show that a rebound in public company health shouldn’t be instinctively transposed onto the privately-held sector.
So are there any theories out there? One could be that publicly-traded companies have better access to credit (and the broader capital markets), thus enabling them to make/sell more product. Another is that publicly-held companies are more likely to export than are privately-held companies, and therefore have rode the recent export rebound.
But, again, I’m really just thinking aloud…