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Large cap stocks

Large cap stocks

Large-cap companies are large corporations with a total value of between $ 10 billion and $ 200 billion. Companies in this category are often old companies that have been around for more than 20 years. There is a much greater volume in these stocks and therefore they will be more stable. This also means that you will often get a lower, but safer return. By investing in companies that belong to the large-cap category.

 

Growth in the earnings

The price of a stock tends to follow the company’s earnings over time. If earnings grow steadily, the share price will also tend to rise steadily. Although past earnings growth does not guarantee more growth in the future, a strong company with a record of high earnings will generally be a good bid for investors.

 

While earnings growth typically means a company’s sales have grown, that’s not always true. Some large companies have been able to generate earnings growth by becoming more efficient over time. These companies can also be very good investments.

Note that cyclical companies do not always have an increase in their earnings, because their earnings tend to decline when the economy slows down. That doesn’t mean it’s a bad investment. For those companies, we take a long-term view: We want to see that their earnings and profit margins during economic expansion have improved over the long run and that they are prepared to reject the upcomming lows without drama.

Category

Markeds kapital

Micro-cap companies

Less than $300 millions

Small-cap companies

$300 millions to $2 billions

Mid-cap companies

$2 billions to $10 billions

Large-cap companies

$10 milliarder to
$200 milliarder

Mega-cap companies

More than $200 billions

Growth in Earnings

The price of a stock tends to follow the company’s earnings over time. If earnings grow steadily, the share price will also tend to rise steadily. Although past earnings growth does not guarantee more growth in the future, a strong company with a record of earnings growth will generally be a good bid for investors.

 

While revenue growth typically means a company’s sales have grown, that’s not always true. Some large companies have been able to generate earnings growth by becoming more efficient over time. These companies can also be very good investments.

Note that cyclical companies do not always have an increase in earnings growth because their earnings tend to decline when the economy slows down. That doesn’t mean it’s a bad investment. For those companies, we take a long-term view: We want to see that their earnings and profit margins during economic expansion have improved over the long run and that they are prepared to reject lows without drama.

 

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