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A recent survey of stocks ordered by largest market capitalization shows that Russell 3000 component Dell Technologies Inc. (symbol: DELL) outperforms the lower end of the S&P 500, such as Carmax Inc. (symbol: KMX). has also been confirmed to have a large market capitalization. , according to The Online Investor.
Market capitalization is an important data point that investors should focus on for a number of reasons. The most basic reason is that the stock market provides a true comparison of the value attributed to a particular company’s stock. Many novice investors see a stock trading at $10 and another trading at $20 and mistakenly think the latter company is worth twice as much. However, comparing market capitalization (taking into account the number of these shares) creates a true “like-for-like” comparison of the value of the two stocks. For Dell Technologies (symbol: DELL), the market capitalization is currently at $9.03 billion, while Carmax (symbol: KMX) he is at $8.92 billion.
Below is a 3-month price history chart comparing the stock performance of DELL and KMX (note that 9 splits were found in the DELL split history).
Another reason market capitalization matters is when you look at a company in terms of size tiers relative to its peers. It’s a lot like comparing midsize sedans to other midsize sedans (not SUVs). This can directly affect which indices include the stock and which mutual funds and his ETFs are willing to hold the stock. For example, a mutual fund that focuses only on large caps may only be interested in companies valued at $10 billion or more, for example. Another illustrative example is essentially taking the S&P 500 index and focusing only on 400 smaller “up-and-coming companies” (companies that could outperform larger companies in the right circumstances). The S&P MidCap Index, which “throws out” the top 100 companies for the sake of rival). Additionally, an ETF that tracks an index directly, such as the S&P 500, owns only the underlying constituents of that index, sells companies that lose their status as S&P 500 companies, and buys companies added to the index. To do. As such, a company’s market capitalization is very important, especially in relation to other companies. This is why TheOnlineInvestor.com sees value in putting these comparative market caps together on a daily basis.
Explore full DELL market cap history and full KMX market cap history.
At the closing bell, DELL rose about 1.1% while KMX fell about 1.8% on Thursday.
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
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