The number of small U.S. companies not turning a profit has reached an unfortunate historic high due to the coronavirus pandemic, the Financial Times reports.
The Russell 2000 index shows 42 percent of small-caps are either just breaking even or operating a loss. The number is the highest since 2010’s 44 percent, the index says.
Bigger companies have been faring better by comparison, with investors taking solace in large caps and the Russell 1000 index down only 3.3 percent from normal. Technology groups have powered the buoyancy of those firms, the Financial Times reported.
The sole sector doing well thus far in 2020 is healthcare, which has seen strong shares from telemedicine company Teladoc. That group has seen a 129 percent gain and its market capitalization has hit over $14 billion, the Financial Times wrote, over $5 billion ahead of the runner up.
Online medical programs such as Teladoc have become more widely-used during the pandemic due to the move toward digital means as people are forced to re-negotiate their lives for fear of infection. Recently, the telemedicine movement has reached pet care, which is a $29 billion industry, according to statistics reported by PYMNTS.
One company capitalizing on the need for vet care is TeleVet, whose CEO Steven Carter told PYMNTS that the platform would likely be a permanent fixture in the years to come as millennials, focused on savvy digital modes of doing business, continued to want services in that digital mode.
As for the economy as a whole, JPMorgan CEO Jamie Dimon remained hopeful in May that the economy would improve in the third and fourth quarters of the year as unemployment eased and the Federal Reserve’s actions continued to boost the economy.