The Yonder 40 — The DY’s Stock Index of Rural America
Finally, there’s a stock index that tells rural America how it’s doing. This is the Yonder 40, forty companies that reflect the economy of rural America John Deere, NASCAR tracks, coal mines, small town banks and newspapers and, of course, Wal-Mart. Can the Yonder 40 beat the big boys at Dow and Standard and Poor’s? We’ll see.
At the end of every day we hear reports that measure the worth of industrial America. The Dow Industrials are up or down. The Standard and Poor 500 advances or retreats. Stocks gain or lose, and America counts its money.
Justin Boots — by Berkshire Hathaway
Photo by Munchkee
Mostly, however, the Dow and the S&P and the NASDAQ are made up of companies based in urban America. The standard stock exchanges may or may not measure the economic vitality of rural America, too. But we here at the Daily Yonder wondered if there might be another sort of stock index that could better reflect the economies outside cities.
We decided to build our own. The editors are pleased to announce today the Yonder 40 — a rural American stock index. Here are two score companies whose fortunes measure, to some degree, the state of rural America’s economy.
We didn’t pick the Yonder 40 out of a hat. DY relied on James Branscome, a native of Hillsville, Virginia, and a former managing director of Standard and Poor. Brother Branscome (now living in Montrose, Colorado) helped choose the stocks for the S&P 500, so finding 40 for the Yonder was no big deal. He received able help from John Borden, a native of Danville, Virginia, and a former director of investor relations for JPMorgan Chase. They both made clear that the Yonder 40 in no way represents investment advice. It is an index of stocks chosen to be representative of the U.S. rural economy and the stocks that do a substantial portion of their business there.
Everyone will find some reason to quarrel with our picks. Berkshire Hathaway? Isn’t that really Warren Buffett’s insurance company? Well, yes, Berkshire is mostly insurance — but it’s also Dairy Queen, Justin Boots and Fruit of the Loom. It’s also run out of Omaha, Nebraska — not officially rural, but more Yonder than your run of the mill hedge fund run by some 30-somethings in $500 shoes.
None of the Yonder 40 businesses is strictly rural. Every company on this list depends on urban America. Cities are covered up these days with Wal-Marts, after all. But each of the firms in the Yonder 40 has strong roots in rural America. They are small town banks, hog raisers, Spam-makers, the Grand Ole Opry, NASCAR tracks, coal miners, farmers, hunters, citrus growers and even our brothers and sisters in the rural press.
The Grand Ole Opry (owned by Gaylord Entertainment). Is that Roy Clark on the big screen?
Photo by Josh Bousel
We’ve “invested” $1,000 in each of the 40 Yonder stocks. Each week we’ll compare the Yonder 40 against four other indexes:
“¢ The Dow Industrials (30 of the nation’s largest companies)
“¢ The S&P 500 (a broader market index; unlike the Yonder 40, investments in the S&P 500 are weighted to reflect the size of the company)
“¢ The NASDAQ index (smaller stocks)
“¢ The Rydex S&P Equal Weighted ETF (this stock invests an equal amount of money in each S&P 500 stock, just as the Yonder 40 invests an equal amount in every stock. Its ticker is RSP.)
How will the Yonder compare to the more urban indexes? We don’t have the slightest idea. But we’ll report each week on how the Yonder 40 is doing.
And so, with no further delay, we present the Yonder 40!
|COMPANY||TICKER||WHAT THEY DO|
|Alico Inc.||ALCO||Oranges, grapefruits, sugarcane and 136,000 acres in Florida|
|Andersons Inc.||ANDE||From turf to ethanol to fertilizer|
|Bassett Furniture Industries Inc.||BSET||Furniture maker in Bassett, Virginia|
|Berkshire Hathaway Inc. Cl B||BRKB||Dairy Queen, Justin Boots, Fruit of the Loom and Clayton Homes|
|Burlington Northern Santa Fe Corp.||BNI||Hauls coal from the Powder River and grain from the Plains|
|Cabela’s Inc.||CAB||Hunt and fish, here|
|Cato Corp. Cl A||CTR||Selling women’s fashion in rural America|
|Cimarex Energy Co.||XEC||Domestic oil and gas producer|
|Citizens Communications Co.||CZN||Provides internet & phone in 23 states|
|ConAgra Foods Inc.||CAG||Butterball, Eckrich, Armour, Ready Crisp; largest buyer is Wal-Mart|
|Dean Foods Co.||DF||Silk soymilk, dairy creamers and Land o’ Lakes|
|Deere & Co.||DE||John Deere green|
|DIRECTV Group Inc.||DTV||“I don’t think she’s seen the sky since we got the satellite dish” James McMurtry|
|FairPoint Communications Inc.||FRP||Phone and internet services in 18 states|
|Family Dollar Stores Inc.||FDO||Every town had a dollar store|
|Fleetwood Enterprises Inc.||FLE||Mobile homes|
|Gaylord Entertainment Co.||GET||Owner of the Grand Ole Opry|
|Hormel Foods Corp.||HRL||Your source for canned pork products — i.e., spam|
|International Speedway Corp.||ISCA||11 race tracks, including NASCAR’s Daytona and Talladega|
|Lee Enterprises Inc.||LEE||58 daily newspapers and more than 300 weeklies all over rural America|
|Mine Safety Appliances Co.||MSA||Produces equipment used in mining|
|Mohawk Industries Inc.||MHK||Carpet maker centered in Dalton, GA|
|Monsanto Co.||MON||We’re talkin’ ag|
|Peabody Energy Corp.||BTU||“Mr. Peabody’s coal train has hauled it away” John Prine|
|Penn Virginia Corp.||PVA||Owner of oil, gas & coal in the east|
|Plum Creek Timber Co. Inc.||PCL||8.2 million acres of timber in 18 states|
|Ralcorp Holdings Inc.||RAH||Ralston Purina spin-off; food proccessor and Beech-Nut baby food maker|
|Regions Financial Corp.||RF||Community banking in the south and midwest|
|Skywest Inc.||SKYW||The airline for those not close to a hub|
|Smithfield Foods Inc.||SFD||Leading hog raiser and meat producer|
|Southern Co.||SO||Biggest power producer in the south|
|Southwest Bancorp Inc.||OKSB||Bank holding company on the Plains|
|Stage Stores Inc.||SSI||Bealls|
|Sturm Ruger & Co.||RGR||Our Second Amendment representative|
|Tractor Supply Co.||TSCO||You know the place|
|Tyson Foods Inc. Cl A||TSN||From chick to chicken salad|
|UST Inc.||UST||Making the stuff that puts the circle in the back pocket of a cowboy’s Wranglers|
|Waddell & Reed Financial Inc.||WDR||Financial advisors to small town America|
|Wal-Mart Stores Inc.||WMT||Any questions?|
|Walter Industries Inc.||WLT||Southern coal producer and mobile homes|