Market capitalization
The Market capitalization, or Market Cap abbreviated is the worth of a company based on their stock price multiplied by the number of shares the company has outstanding.
A company that is trading at 20 dollars a share and has 1 million shares is worth 20 million dollars, see how simple it is to calculate the market cap of a company!
Stocks that have a market cap of under 100 million are considered very small cap stocks, which means they are very small, volatile, and hard to get information on. These stocks tend to be very risky and do not make very good long term investments in my opinion.
Stocks that have a market cap of between 100 million and 1 billion are considered small cap companies. They are small, but large enough to get plenty of financial information on. Small cap companies tend to get the best returns over time.
Mid cap companies are defined as being between 1 billion and 10 billion dollars in market capitalization. These companies are big and recognizable but they still have plenty of room for growth, which puts them in an enviable position.
Large cap companies are 10 billion+, according to me at least. These companies are very recognizable to the average guy and are very mature.
The largest company in terms of market capitalization is Exxon Mobil, which has a market cap of 320 billion currently. That makes Exxon the most valuable company in the world!