Chin Up in the Downswing: Ethics Pay Off; Education Sector IPOs Look Promising
by Anne Szustek
The Neuberger Berman Socially Responsive Fund is showing a strong cash flow, 99 companies get plaudits for ethical business practices and two education IPOs are set to launch this week.
Historically, “sin sector” stocks, which include alcohol, gambling and tobacco, are generally a safe bet in bearish financial markets. However, this has not been the case during much of this recession. The latest data point for this phenomenon: investment management firm Neuberger Berman’s Socially Responsive Fund. This mutual fund, which categorically avoids investing in tobacco, alcohol, gambling, nuclear energy and defense, then ranks stocks in terms of preference and factors like environmental policy and employment diversity, “is seeing investor inflows—a claim that very few mutual funds can make,” writes BloggingStocks.
Also on the “good guys win” beat: New York think tank Ethisphere Institute profiled 99 companies today for its third annual list of firms it deems the world’s “most ethical.” Candidates were judged on a variety of factors, including corporate sustainability, corruption, business ethics and social responsibility. “This year's group features 22 first-time recipients including Dell Inc, Thomson Reuters Corp, Best Buy Co Inc and T-Mobile International AG & Co KG,” writes Reuters. Among the three-time winners are General Electric, PepsiCo, IKEA, Starbucks and American Express. Ethisphere Institute Executive Director Alex Brigham told Reuters that some companies featured, such as Nike, made the list because of clear attempts to improve their corporate ethics profile.
Online higher-educational institution Bridgepoint Education and foreign-language learning software firm Rosetta Stone are gearing up for initial public offerings on the New York Stock Exchange this week, signaling both hope within the parameters of company growth as well as in the vitality of the financial markets. Both companies reported steep increases in earnings during 2008 and reported tens of millions of dollars’ worth of earnings. “Both companies are young, technology-centered and fast-growing,” writes The Wall Street Journal. “Their business models also include a key revenue driver that any tech investor looks for: scalability, or the ability to add new customers at low cost.”