The Least Transparent Stocks in America
NEW YORK (TheStreet) - What do Abercrombie & Fitch (ANF) - Get Abercrombie & Fitch Co. Class A Report
pictured below
, Lorillard (LO) and HCP (HCP) - Get HashiCorp, Inc. Class A Report all have in common? Something they would likely rather not have in common: they are among the corporate names that have been black-listed by Corporate Responsibility Magazine for their lack of transparency.
In its most recent issue released today,
CR Magazine
cited 30 companies, including
Scripps Networks Interactive
(SNI)
and
SL Green Realty
(SLG) - Get SL Green Realty Corp. Report
, each with zero points of relevant data to compare their transparency to their peers on the Russell 1000 list of large-cap firms.
CR Magazine
used 349 data points (the same used to compile its "100 Best List") in seven categories -- environment, climate change, human rights, employee relations, philanthropy, financial and governance -- to tally the black list.
According to
CR's
report, 612 of the 1,000 offered no discernible disclosures relevant to climate change performance, 600 companies did not have information on broader environmental issues and 161 did not even provide basics about their employee-benefit programs.
The magazine said it contacted each of the companies in the bottom 30 requesting any data that would help correct files, but none of the firms responded.
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In light of the fraud and good, old-fashioned corporate malfeasance that helped fuel the recent economic downturn, information on the behavior of a company has, of course, become increasingly important to investors. But there is not only a moral obligation for these companies to reveal their practices, but a financial one, too. When comparing the three-year return to shareholders between
CR's
2010 "Best 100" companies and the "Black List,"
CR
found a clear correlation between performance and transparency.
The top 100 most transparent companies -- a list that includes
Hewlett-Packard
,
Intel
(INTC) - Get Intel Corporation Report
,
General Mills
(GIS) - Get General Mills, Inc. Report
and
International Business Machines
(IBM) - Get International Business Machines Corporation Report
-- averaged a return of 2.4% during the latest threee-year span, while the bottom 28 out of 30 least transparent companies experienced a 7.4% decline during the same time period.
While certain aspects of a company's financials are required to be reported to the Securities and Exchange Commission (like stock options offered to executives), other factors (like how a company treats its workers or if it dumps toxic waste), do not have to be recorded. But this doesn't mean a company doesn't have a responsibility to its shareholders.
Those without disclosures in these areas raise questions of credibility, according to
CR
.
"From their lack of disclosure we do not know if they are afraid of the data due to poor performance, if they are thumbing their corporate noses at us or, worse, if they are not even aware that stockholders care," the report stated.
It would not be hard for these companies to get themselves off the list,
CR
says; all they would have to do is make a few data points publicly available.
"Some of the actions required are the public company hygiene equivalent of washing your hands after visiting the restroom," the report said. "Yet all 'Black List' companies have made a decision to skip that basic step."
In light of all this, we've decided to bring the question to you: Which of the following companies on the
CR
list do you consider to be the least transparent? Take the poll below to see what
TheStreet
thinks.
-- Reported by Jeanine Poggi in New York.
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