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2015 Fortune Global 500 – Analysis and trends of the ranking

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The Fortune Global 500 list for 2015 has just been released by the famous financial magazine. The list provides an annual snapshot of the world’s largest companies ranking them by revenue. On the Fortune’s website, you can however rank the companies according to different metrics (revenue change, profits, profit change, assets, employees, gain in rank…). You can also apply multiple filters (industry, country, sector…) in order to compare companies of the same investment universe.  In 2014, according to Fortune, the world’s top 500 companies pulled in a total of $31.2 trillion worth of revenues and $1.7 trillion worth of profits. While revenues hit an all-time high record for the second consecutive time (0.5% higher than last year), the profit level represents a fall of nearly 17% in total profits for the 500 biggest companies compared with the previous year. A plunge that is, according to Fortune, mainly due to the fall in crude oil prices as well as strictly lower contribution form US mortgage giants Fannie Mae and Freddie Mac ($22 billion in profits in 2014 vs. $133 billion in 2013).

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Walmart still dominates the Fortune Global 500 list

In the Fortune Global 500 list, companies are ranked by total revenues covered by their respective fiscal years, which must have ended on or before March 31 of this year. For the second consecutive year, US retailer Walmart tops the ranking. Walmart is followed by Chinese oil producer Sinopec Group, Royal Dutch Shell plc and China National Petroleum. ExxonMobil, the famous US oil giant, rounds out the Top 5, followed by BP in sixth place and Chinese electricity supply services provider State Grid in seventh place. Next come auto makers Volkswagen and Toyota Motor. Switzerland headquartered diversified natural resources company (energy, metals and mining) Glencore completes the Top 10 of the ranking.

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Walmart, the US retailer that operates discount stores, supercenters, and neighborhood markets and that leads again this 2015 Fortune Global 500 ranking, already claimed the first place 10 times since 1995. Even though the company recently suffered multiple issues (consumer transition from big malls to local stores, e-commerce competition, replacement of the CEO of its $288 billion US division…), the company was still able to bring in revenue of $486 billion for a profit of $16.36 billion, both up 2% compared to last year.

Energy and industrial companies still lead the ranking

Despite the current fall in oil and commodity prices, Energy and producers are still well represented in the ranking. Almost one-fifth of the top 100 companies are major oil and gas producers. Energy producers were even able to claim 6 different spots in the top 10 list. Nevertheless, as explained above, the fall in crude oil prices strongly reduced the operational profits of most oil producers and led to some major swings in the ranking. Interestingly enough, most of the top ranking companies still belong to the industrial group. Despite the fact that digital and high tech firms are often taking center stage in the media, the first “digital” company in terms of revenue only comes at the 88th place with Amazon. Apple, which comes second in the list in terms of profits, only claims the 15th place on the list based on revenues with an annual turnover of $183 billion.

Asian companies are gaining traction

Asian companies are rapidly expanding in the ranking this year, amounting to 106 places on the Fortune Global 500 ranking for 2015. But more interestingly, Asian-based companies top the Fortune Global 500 list in terms of newcomers. From the 23 new companies that joined the Fortune list this year, 11 are Asian-based. China, in particular, ranks second after the US in terms of number of companies included in the ranking with 106 firms making it to the Fortune Global 500 list compared to 128 entities for the United-States. Eventually, 3 Chinese companies make it the top10 of the ranking: Sinopec (2nd), Petro China (4th) and State Grid (7th). In terms of profit, Industrial & Commercial Bank of China captured the title of single biggest profit maker in 2015 with $44.08 billion in net income, followed by Apple with 39.5 billion in profit as explained above.

A useful list for binary options traders

This Fortune Global 500 list can turn out to be really useful for active traders. First, it can provide you with a quick overview of the most powerful companies in terms of revenues, assets… Most day traders focus on the biggest companies whose equity stocks are extremely liquids and on which technical analysis patterns are extremely effective. If you are able to thoroughly investigate on let’s say the 20 biggest US companies of the Fortune list, then you will be able to implement a lot of different strategies on these blue chips. You will find that, most of time, binary options brokers are only able to offer options on the most liquid and popular equity stocks. These are typically the companies that are listed on the Fortune Global 500 list. The magazine is providing a summary of each company along with an analysis of the threats and opportunities of each business.

You should nevertheless be careful with this ranking. Indeed, revenue is only one of the many fundamental criteria you should look at when you want to speculate on a company. This big figure alone does not tell you anything about the company. You need to look at the rate of growth of this figure; you need to compare it with the level and growth of the profits of the company. You should also take into account fundamental financial ratios such as the PE (Price-Earning ration) or ROE (Return-on-Equity) to get more insights into how these profits are funded (debt or equity) and to better asses the relative cheapness or expensiveness of the related equity stock.

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In order to access the official 2015 Fortune Global 500 ranking, click here.

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