Will Rolls Royce be the UKs biggest company by market cap?

SneakySpectator

In 2020 it was ranked the 84th largest UK company with a market cap of £2.4b, how it's ranked 7th with a market cap of £84b.

For it to be number 1 it needs a market cap of £164b, that's just less than a 100% increase from where it is now. 

Hoenir

Might be one day might not. 

eskbanker

SneakySpectator said:

For it to be number 1 it needs a market cap of £164b, that's just less than a 100% increase from where it is now. 

....and the current top six not to grow too, while that mere 100% growth is happening!

Cus

SneakySpectator said:

In 2020 it was ranked the 84th largest UK company with a market cap of £2.4b, how it's ranked 7th with a market cap of £84b.

For it to be number 1 it needs a market cap of £164b, that's just less than a 100% increase from where it is now. 

Considering it's gone up in market cap by over 1000% in the last 5 years, why not?

MX5huggy

I’m all in on RR, 0.1% of my portfolio. 

GazzaBloom

From an investors point of view that's the wrong question. When considering a single stock you should be asking yourself how well do I know this business, it's products, the market it operates in, the competition it faces, it's balance sheet, it's ability to perform in different economic or political environments, it's management team and future business plans? 

InvesterJones

GazzaBloom said:

From an investors point of view that's the wrong question. When considering a single stock you should be asking yourself how well do I know this business, it's products, the market it operates in, the competition it faces, it's balance sheet, it's ability to perform in different economic or political environments, it's management team and future business plans? 

From threads previously started by the OP, I think they have a focus on individual company sizes and what proportion of an index they make up, for some reason. 

My initial reaction was 'in what timeframe?' and then 'who cares?' but I wanted to be constructive so I was thinking about the last one some more - I suspect there's the usual mistake being made of comparing economy and index - RR is a valuable employer in the UK (but far from unique in that respect) so it does make for good (at least political) capital in it doing well. That has nothing to do with it's position in an index however. So where would index matter? If you're investing in an index tracker then of course it's useful to know what makes up the index if you are concerned that certain sectors/factors while under/perform others, though in the very long term I suspect it balances out somewhat, or at least, isn't forwardly predictable. 

Hoenir

Cus said:

SneakySpectator said:

In 2020 it was ranked the 84th largest UK company with a market cap of £2.4b, how it's ranked 7th with a market cap of £84b.

For it to be number 1 it needs a market cap of £164b, that's just less than a 100% increase from where it is now. 

Considering it's gone up in market cap by over 1000% in the last 5 years, why not?

Far easier for a smaller/lower valued company to grow quicker in % terms. That's basic maths. Growth in size for any company is ultimately infinite. 

SneakySpectator

InvesterJones said:

GazzaBloom said:

From an investors point of view that's the wrong question. When considering a single stock you should be asking yourself how well do I know this business, it's products, the market it operates in, the competition it faces, it's balance sheet, it's ability to perform in different economic or political environments, it's management team and future business plans? 

From threads previously started by the OP, I think they have a focus on individual company sizes and what proportion of an index they make up, for some reason. 

My initial reaction was 'in what timeframe?' and then 'who cares?' but I wanted to be constructive so I was thinking about the last one some more - I suspect there's the usual mistake being made of comparing economy and index - RR is a valuable employer in the UK (but far from unique in that respect) so it does make for good (at least political) capital in it doing well. That has nothing to do with it's position in an index however. So where would index matter? If you're investing in an index tracker then of course it's useful to know what makes up the index if you are concerned that certain sectors/factors while under/perform others, though in the very long term I suspect it balances out somewhat, or at least, isn't forwardly predictable. 

I tend to focus on company sizes because index funds are weighted by market cap. So the more market cap a stock has, the more of your money goes into it, even if you don't want it to.

eskbanker

SneakySpectator said:

I tend to focus on company sizes because index funds are weighted by market cap. So the more market cap a stock has, the more of your money goes into it, even if you don't want it to.

But if you sign up to the concept of passive index investing, you intrinsically accept the lack of control over which specific entities you're ultimately invested in, whereas if you prefer a more active style of management then you'd skip indices and buy into your choice of individual equities instead.

SneakySpectator

eskbanker said:

SneakySpectator said:

I tend to focus on company sizes because index funds are weighted by market cap. So the more market cap a stock has, the more of your money goes into it, even if you don't want it to.

But if you sign up to the concept of passive index investing, you intrinsically accept the lack of control over which specific entities you're ultimately invested in, whereas if you prefer a more active style of management then you'd skip indices and buy into your choice of individual equities instead.

Hypothetical question but let's say one say Nvidia ends up being 50% of the entire S&P500 index, would passive index trackers actually allocate 50p for every £1 into Nvidia? Or would they intervene and adjust it manually?