The Entrex Private Company Index (PCI) report for March shows a moderate decline in overall revenue performance from its cross-industry portfolio of North American private companies. Per earnings data reported by PCI member companies, overall revenue performance was down 2.6% during the month of February. In fact, exactly half of the vast PCI portfolio cited a downward shift in gross revenues as compared to the prior month.
Standing alone this data could appear foreboding for the sector, but when viewed in the historical perspective of the PCI’s annual trends it’s clear to see that a drop in Q1 is standard and consistent with the last three year’s data.
Comparatively, during this same period, the public capital market indicators (DJIA, Nasdaq Composite, and S&P Small Cap 600) were each up 2-4%. This was expected as equity markets are still in recovery mode from 2008 and 2009. In fact, over a four-year comparison, where the PCI shows an increase of 290%, the public indicators only revisited their four-year old baseline starting level in Q4 2009—coming off a very serious dip in value.
Stephen H. Watkins, CEO of the Entrex Private Company Index, explains it this way; “The comparison is dramatic. Hypothetically, if you invested $100 in one of the three public indicators four years ago, your investment would only now be worth $100 again. I think everyone can agree that is not a desirable medium-term investment return.”
“Conversely,”
PCI analysts note that it's typical of the index to perform conversely to the public indicators and that over a four year period of review there is no discernable behavior relating the private company group to the performance of the public sectors. Time and again the PCI has proven to act independently in a variety of macroeconomic cycles. Charts depicting this data can be viewed at www.privatecompanyindex.com.
ABOUT THE PRIVATE COMPANY INDEX (PCI):
Sponsored and administered by Entrex, Inc. (www.entrex.net)
