Boston, MA 08/18/2014 (wallstreetpr) – According to reports, Eli Lilly & Co. (NYSE:LLY) has lost its place as the 58th largest company of the world. It has been replaced by a well known parcel service company United Parcel Service, Inc. (NYSE:UPS).
The Online Investor Inc. reported that on the basis of orders placed by several companies of underlying components of the S&P 500, UPS surpassed the Eli Lilly & Co. (NYSE:LLY) and grabbed the 58 largest company positions. The size of any company is determined by the market capitalization of that particular company. It is an important data point for the investors to pay attention due to several reasons.
The best part about market capitalization is that it gives a true comparison between the values attributed by the share market to the stock of a company. Most of the investors think that two stocks A and B that are trading at $10 and $20 are not similar to each other. They think that company B is double of the size of that company A which is a wrong interpretation. It’s baseless to compare two companies on the basis of their share price unless the number of shares is known. When it comes to market capitalization, one can always rely on the result received after the comparison.
In the case of United Parcel Service, Inc. (NYSE:UPS) and LLY, the market capitalization has changed. Reports claim that the new market capitalization of UPS is $68.41 billion while the LLY’s market capitalization is $67.98 billion. As soon as the news got spread in the market on Friday, the shares of UPS went up by 0.8% while the shares of LLY went down by 0.6%. Experts consider it a positive sign for UPS and estimate a further inclination in the stock prices in coming time. According to the latest data, LLY and United Parcel Service, Inc. (NYSE:UPS) made up around 3.86% of the First Trust Capital Strength ETF on Friday, which was 0.6% down than the previously recorded ETF.