Generally "mid-cap" refers to stocks of companies having a market cap between $1.5 billion and $10 billion. These terms refer to a company's market capitalization, which is the number of outstanding shares times the stock's price.
Mid-cap stocks may have once been defined as large cap, but fell out of favor with investors. The thing to remember about market capitalization is that it is based on the price of one share of stock. Specific company stock returns, within a favorable market, can bump up from mid to large or dive in the other direction when conditions are reversed. Mid-cap stock performance usually falls somewhere in between the returns of their large- and small-cap counterparts.
Mid - Cap Stocks with high price momentum Shares of those companies with a market capitalization between Rs. 100 crores and Rs. 1000 crores and which have gained in-terms of price over a three - month period.
Small cap : $250 Million to $2 Billion, approximately
The 80-15-5 method:
BSE’s classifies companies according to their Market Capitalization by using the 80-15-5 method. Here’s how this method works:
"Hard to believe papa was once a kid" goes an ad-line of a mutual fund scheme that invests in mid-cap stocks. Indeed it's hard to believe Infosys and Airtel were lesser-known companies 15 years ago. Today they are among the heavyweights of the country's two most well-known large-cap indices ' the Bombay Stock Exchange's Sensex and the National Stock Exchange's Nifty.
There are many such names which were once small or mid-cap companies but are now prominent large-cap companies that have generated very good returns over the years for investors.
EXPERT TIP: Defensive stocks help during market volatility
Fast growing economy like ours with a liberalised industrial and services sectors, the chances of finding small and mid-level companies with potential to becoming large corporations are much better than the developed economies like the US and Europe.
In this section, we try to zero in on some mid-cap companies with the potential to become large-cap companies in the next 5-10 years. We asked large brokerage houses to come out with their list of mid-cap companies that they believe have it in them to outperform others.
Mid-cap stocks may have once been defined as large cap, but fell out of favor with investors. The thing to remember about market capitalization is that it is based on the price of one share of stock. Specific company stock returns, within a favorable market, can bump up from mid to large or dive in the other direction when conditions are reversed. Mid-cap stock performance usually falls somewhere in between the returns of their large- and small-cap counterparts.
Mid - Cap Stocks with high price momentum Shares of those companies with a market capitalization between Rs. 100 crores and Rs. 1000 crores and which have gained in-terms of price over a three - month period.
Small cap : $250 Million to $2 Billion, approximately
Mid cap : $2 Billion to $10 Billion, approximately
Large cap: $10 Billion and up, approximately
We have frequently heard about some companies being Large-cap (For e.g. Reliance, Infosys etc.) while others being Midcap or Small-cap companies. Wonder how they are classified? Let’s take a look at how the BSE classifies companies according to their market capitalization.
The 80-15-5 method:
BSE’s classifies companies according to their Market Capitalization by using the 80-15-5 method. Here’s how this method works:
- Arrange all the companies in descending order of their Market Capitalization.
- The group of companies from the top, which together contribute 80% of the total Market Capitalization are Large-cap Companies,
- The next group of companies contributing 15% (80-95%) of Market capitalization are Mid-cap companies, and
- The remaining companies which contribute 5% of Market Capitalization are Small-cap companies.
"Hard to believe papa was once a kid" goes an ad-line of a mutual fund scheme that invests in mid-cap stocks. Indeed it's hard to believe Infosys and Airtel were lesser-known companies 15 years ago. Today they are among the heavyweights of the country's two most well-known large-cap indices ' the Bombay Stock Exchange's Sensex and the National Stock Exchange's Nifty.
There are many such names which were once small or mid-cap companies but are now prominent large-cap companies that have generated very good returns over the years for investors.
EXPERT TIP: Defensive stocks help during market volatility
Fast growing economy like ours with a liberalised industrial and services sectors, the chances of finding small and mid-level companies with potential to becoming large corporations are much better than the developed economies like the US and Europe.
In this section, we try to zero in on some mid-cap companies with the potential to become large-cap companies in the next 5-10 years. We asked large brokerage houses to come out with their list of mid-cap companies that they believe have it in them to outperform others.
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