A Look at Barron's 'Most-Respected Companies'

SMITH BRAIN TRUST — Four of the top five companies in Barron's 2017 listing of the most-respected publicly traded firms in the United States share a common trait. They're technology companies.

The Barron's 100 is drawn by surveying money managers, whose attraction to tech is simple to understand, says Clinical Professor of Finance David Kass at the University of Maryland's Robert H. Smith School of Business. "That is where there is growth — in the economy, in earnings per share, in revenue," Kass told the Washington Post.

Look at the share prices, he said. Alphabet was up 36 percent in the past 12 months and 27 percent so far in 2017 — with its share price surging above $1,000 Monday. The Standard & Poor's 500-stock index, which reflects the performance of the 500 largest U.S. public companies, was up 17 percent over the past 12 months and 7 percent this year.

Apple was up 57 percent this week over the past year and 33 percent year to date. Amazon — whose stock passed $1,000 a share Friday — was swimming in the same pools. Its share price increased 39 percent in the past 12 months and 35 percent so far this year.

"The economy by contrast is only growing at 2 percent," Kass said, "but these companies are outpacing virtually all other industries in revenue and profit growth, and share price is following along."

Of course, there is value outside of the tech sector as well. The image of tobacco companies making products that are dangerous to people's health may have created opportunities for investors willing to trade in the shares.

"In the recent years, tobacco stocks have actually outperformed the S&P 500 because many investors avoid them," Kass said. "Some mutual funds perhaps are prohibited from investing in them. It creates a reduction in demand and lower share price. That in turn is an opportunity for investors to actually do reasonably well."