Noteworthy Thursday Option Activity: GL, AXP, AIZ Thursday, March 21, 2:04 PM ET, by Market News Video Staff Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume ...
XLI, GE, UBER, BA: ETF Inflow Alert Tuesday, March 26, 12:02 PM ET, by Market News Video Staff Symbols mentioned in this story: XLI, GE, UBER, BA Exchange traded funds (ETFs) trade just ...
GE Crosses Above Average Analyst Target Thursday, March 28, 9:15 AM ET, by Market News Video Staff In recent trading, shares of General Electric Co (GE) have crossed above the average analyst ...
AXP May 10th Options Begin Trading Thursday, March 28, 10:37 AM ET, by Market News Video Staff Investors in American Express Co. (AXP) saw new options begin trading today, for the May ...
American Express Moves Up In Market Cap Rank, Passing General Electric
By Market News Video Staff, Wednesday, March 24, 4:49 PM ET
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 American Express Co. (NYSE:AXP), the market cap is now $111.21 billion, versus General Electric Co (NYSE:GE) at $109.81 billion.
Below is a chart of American Express Co. versus General Electric Co plotting their respective size rank within the S&P 500 over time (AXP plotted in blue; GE plotted in green):
Below is a three month price history chart comparing the stock performance of AXP vs. GE:
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 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). So a company's market cap, especially in relation to other companies, carries great importance, and for this reason we at The Online Investor find value to putting together these rankings daily.
At the closing bell, AXP is up about 1.7%, while GE is off about 1.3% on the day Wednesday.
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