Study of Investment Potential of Circular Business' Companies

Abstract

In the last decade, a number of scientists around the world have been considering the transition from the traditional linear to circular economy, seeing it as part of the fourth industrial revolution, which should result in significant improvements in the sustainable use of natural resources. Many large international corporations are gradually beginning to engage in this transition by developing and implementing technologies for circular business in their production chains. The article considers the investment potential of shares of such companies; how attractive shares of corporations working with circular business technologies may be for investors. In order to achieve the aim of the research the authors consider several from major international corporations operating in technologies of both old linear economy and circular economy. Using the technical possibilities of the Internet resources a number of charts reflecting comparative dynamics of share prices of each of the studied companies with the Standard & Poor's – 500 index of the stock market have been constructed and analysed. It also studied the comparative dynamics of each from those companies’ share price with the relevant sector indices. It is concluded that, in the current environment, the circular business of large international corporations does not yet have any significant impact on the change in the share price of the relevant company. The company's core business is still decisive. Therefore, when looking for stocks with significant investment potential, the extent of a company's involvement in the circular economy may be taken into account, but this factor should not be decisive for the investment decision. The development of the circular economy is very important from the point of view of the social and environmental impacts of human economic activity, but there is currently no reason to claim that circular business companies have high investment potential. This issue requires further research.