I felt a need to skim the companies out there and gain a sense of the breadth of industries. Making the research post on Berkshire’s investments during the past 10 years showed me the countless companies that I’ve never heard of. I want to do something about that. The research post of several companies in the restaurant sector, followed by some randomly selected companies was a first attempt in this initiative. However, the limitation was apparent as it took too long for a skim, yet too shallow for a deep-dive. My subsequent attempt is to refocus on skimming. After a brief research on each GICS classification, I aim to read all the Yahoo Finance overviews for the S&P 500 companies that belong to the class. Furthermore, I will read the overview and MD&A of 10-K and the latest earnings call transcript for only select companies. The goal is to come up with my understanding for businesses in each sector to a reasonable depth, in an efficient way.
About GICS
GICS is a classification framework developed by S&P Global and MSCI. GICS classifies companies into 11 sectors – energy, materials, industrials, consumer discretionary, consumer staples, health care, financials, information technology, communication services, utilities, real estate. The sequence embodies to some degree the value chain. Energy is at the very beginning. It is then converted into materials, which become the blocks that enables the industrials sector. Then comes the two downstream consumer sectors followed by three sectors with greater complexity – health care, financials, information technology. Communication services, utilities come next, and real estate last.
Five-year return on S&P 500 was 100%. Information technology is the only sector that beat the index. Communication services and industrials gave acceptable returns. Although, Google, Meta, Netflix is classified as communication services. It shows just how big-tech roared in the past 5 years.
Source: Fidelity
As of October 2024, S&P 500 market cap total is around $50t with 503 companies. US equity market cap is around $56t. S&P 500 accounts for roughly 90% of US total.
Information technology accounts for 29% with 69 companies.
Apple, Nvidia, Microsoft, Broadcom, Oracle, AMD, Adobe, IBM, Uber are in this sector.
Financials accounts for 15% with 72 companies.
Berkshire Hathaway, JP Morgan Chase, Visa, Mastercard, Bank of America, Blackrock, KKR, Morgan Stanley, Goldman Sachs are in this sector.
Health care accounts for 11% with 62 companies.
Eli Lily, Johnson & Johnson, Abbvie, Merck, Pfizer, Amgen, United Health, Thermo Fisher are in this sector.
Consumer discretionary accounts for 11% with 50 companies.
Amazon, Tesla, Home Depot, McDonald’s, Booking Holdings, Airbnb, GM, Ford, TJX companies are in this sector.
Industrials accounts for 9% with 78 companies.
Caterpillar, GE, RTX, Lockheed Martin, Boeing, Union Pacific, Honeywell, Eaton are in this sector.
Communication services accounts for 9% with 22 companies.
Google, Meta, Netflix, Disney, T-Mobile, Verizon, AT&T, Charter Communications, Comcast are in this sector.
Consumer staples accounts for 5% with 38 companies.
Walmart, Costco, Target, Coca-Cola, PepsiCo, Procter & Gamble, Colgate-Palmolive, Philip Morris, Altria are in this sector.
Energy accounts for 5% with 22 companies.
Exxon Mobil, Chevron, Conoco Philips, EOG Resources, Philips 66, Occidental Petroleum are in this sector.
Materials accounts for 3% with 28 companies.
Linde, Sherwin-Williams, Air Products & Chemicals, Corteva, Newmont, Nucor are in this sector.
Utilities accounts for 3% with 31 companies.
NextEra Energy, Duke Energy, Southern Company, Dominion Energy, Constellation Energy are in this sector.
Real Estate accounts for 2% with 31 companies.
American Tower, Equinix, Prologis, Welltower, CBRE are in this industry.
Source: Finviz
Written from scratch by Meston Ecoa
May contain incorrect data and information