The right balance

Article Excerpt

We always try to strike a balance in the information we provide — not too little and not too much. One bit of information that doesn’t get the attention it deserves is a company’s market capitalization or “market cap”. This is the value of all common stock it has outstanding. When analyzing a stock, we of course always look at its market cap. Now we have decided to add this figure to the information we routinely provide to you at the beginning of each of our recommendations. Market cap gives you one way to judge the potential impact of, say, an acquisition. A $100 million takeover is huge for a company with a $200 million cap. It’s near-negligible for a company with a $200 billion cap. Market cap also helps provide context for other so-called “one-off” events, such as fines and lawsuits. For instance, Bank of America’s market cap is now around $240 billion. If a disgruntled borrower were to sue the bank for, say,…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.