The Forbes 100 model on Covestor, managed by Philip Dhingra, banks on the philosophy that a great employer has a better chance of becoming a great success as a company. If this is correct, it would mean that employers who treat their employees well could make great investments. The model invests only in those companies that make Fortune Magazine’s annual list: 100 Best Companies to Work For. Let’s take a look at two of the model’s top holdings.
Since it tops almost every “Ideal Employer” list, it’s no surprise to see Google Inc (NASDAQ: GOOG) as the model’s biggest holding. Stories of GOOG’s free cafeterias, on-site haircuts, laundry services and other perks have been a point of jealousy among office workers everywhere for years. Their net revenues and earnings per share have increased steadily over the past 4 years, their price to earnings ratio is low compared to their peers and competitors and they continue to develop solutions for online data management that keep them in place as a leading search engine, email and internet app provider.
Another top position in the model, Brocade Communications Systems Inc (NASDAQ: BRCD), made the Fortune list due to their efforts to stop employee losses during the recession. As an example of their efforts, they closed down their plant for 10 days in 2009 and had employees take 10 days off without pay in order to save some money and avoid layoffs. BRCD, a provider of networking solutions, has a lower price to earnings ratio than competitors and peers and their net revenues have been increasing since 2006. The company shows continued fiscal responsibility as their total liabilities decreased from $1.7 billion in 2009 to $1.4 billion during the second quarter of 2010.
