In the latest look at stocks ordered by largest market capitalization, Russell 3000 component Forest City Enterprises, Inc. (FCE.A) was identified as having a larger market cap than the smaller end of the S&P 500, for example Graham Holdings Co. (GHC), according to The Online Investor.Market capitalization is an important data point for investors to keep an eye on, for various reasons. The most basic reason is that it gives a true comparison of the value attributed by the stock market to a given company's stock. Many beginning investors look at one stock trading at $10 and another trading at $20 and mistakenly think the latter company is worth twice as much — that of course is a completely meaningless comparison without knowing how many shares of each company exist. But comparing market capitalization (factoring in those share counts) creates a true "apples-to-apples" comparison of the value of two stocks. In the case of Forest City Enterprises, Inc. ( FCE.A), the market cap is now $3.57B, versus Graham Holdings Co. ( GHC) at $3.29B. Below is a three month price history chart comparing the stock performance of FCE.A vs. GHC (Note that we have found 1 split in the FCE.A split history): Another reason market capitalization is important is where it places a company in terms of its size tier in relation to peers — much like the way a mid-size sedan is typically compared to other mid-size sedans (and not SUV's). This can have a direct impact on which indices will include the stock, and which mutual funds and ETFs are willing to own the stock. For instance, a mutual fund that is focused solely on Large Cap stocks may for example only be interested in those companies sized $10 billion or larger. Another illustrative example is the S&P MidCap index which essentially takes the S&P 500 index and "tosses out" the biggest 100 companies so as to focus solely on the 400 smaller "up-and-comers" (which in the right environment can outperform their larger rivals). And ETFs that directly follow an index like the S&P 500 will only own the underlying component of that index, selling companies that lose their status as an S&P 500 company, and buying companies when they are added to the index. So a company's market cap, especially in relation to other companies, carries great importance, and for this reason we at TheOnlineInvestor.com find value to putting together these looks at comparative market capitalization daily.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Stocks
Kraft Heinz Dips as Warren Buffett Says He Overpaid for Stake, Denies 3G Rift
Kraft Heinz KHC shares drifted lower Tuesday, extending a year-to-date decline of around 30%, after billionaire investor Warren Buffett said he 'overpaid' for the packaged food group when he purchased it along with 3G Capital in 2015, but pledged to support incoming CEO Miguel Patricio.
Facebook Libra Gets Mixed Reviews From Regulators as Cryptocurrencies Surge
Facebook's plans to launch a global digital currency next year, known as Libra, are getting mixed reviews from central bankers and regulators around the world, but the social media group's drive towards financial services could represent the next wave of tech-sector influence.
Micron, FedEx, Trump-Xi, Tesla and Amazon - 5 Things You Must Know
U.S. stock futures decline as investors take a defensive stance on risk ahead of this weekend's G-20 summit in Japan; Micron reports earnings Tuesday; FedEx, which also reports earnings, sues the U.S. government arguing new trade regulations put an 'impossible burden' on the company to monitor its shipments.
FedEx Files US Government Lawsuit Over 'Impossible Burden' of Package Liability
FedEx filed a lawsuit against the U.S. government late Monday arguing new trade regulations put an "impossible burden" on the world's biggest package delivery company to monitor the origins of shipments to and from the United States.