According to CompaniesMarketCap data, Turkish companies generate 0.20 percent of the total turnover and 0.21 percent of the total profit of 5941 giant companies, yet can only get a 0.10 percent share of the total market value.
While investors were trying to adjust Fed’s tightening monetary policy and interest rate plans that affect all financial markets, the Russian war that broke out of thin air turned all calculations upside down. Last week, we tried to analyze how stock markets reacted to wars through past examples. The general looks of it show that the course is similar compared to conflicts in past. But when we look outside the agenda, it is crucial to acknowledge that there is much more than wars about the value of national stock markets or giant companies. Here are some statistics showing the accuracy of a frequently used saying: Geography is a countries’ destiny…
COMPARISON OF GLOBAL 5941 GIANT COMPANIES
A website called Companiesmarketcap tries to rank the world’s largest companies by market capitalization, with up-to-date data on a regular basis. The data here includes 5941 global companies. The total market value of these companies is 91 trillion 435 billion dollars. These companies, which generate a total turnover of 39 trillion 95 billion dollars, generate a total profit of 4 trillion 910 billion dollars. It employs 92 million 273 thousand 950 people in total. When we put this into calculation using financial valuation ratios, the total market value/sales average of 5941 giant companies is traded at a multiplier level of 2.34 and an average of 18.62 price/earnings ratio. These companies generate an average market value of 991 thousand dollars per employee, a turnover of 423 thousand 684 dollars, and a profit of 53 thousand dollars.
What about when we look at it on the basis of countries? Here are some very striking data. For example, let’s start with Turkey. Even though there are 10-15 companies from Turkey that have a large market value and could enter the list but did not. However, let’s still go over the data available. Accordingly, although Turkish companies produce 0.20 percent of the total turnover and 0.21 percent of the total profit of 5941 giant companies, they can only get a share of 0.10 percent of the total market value. For example, Russian companies, which have been at war with Ukraine and are exposed to the harsh sanctions of the whole world, can only get a 0.29 percent share of the total market value, although they produce 1.18 percent of the total turnover and 1.72 percent of the total profit. American companies, on the other hand, capture a share of the global market value much more than their total turnover and profit numbers.
PRICE PREMIUM POTENTIAL OF TURKISH COMPANIES
Data shows that valuation in stock markets alone is not enough for companies to get the value they deserve for their operational or financial success. The ranking also shows us the countries which have the strongest political influence in the world today as well as the countries that stand in the background as sleeping giants. It is clear that the market valuations of the countries led by the UK, the USA, or other powerful countries in Europe are also above the average.
Based on these data, it is not difficult to see that Turkey still has a long way to go in terms of market value, which is approximately twice their current market value. This means a 100% premium potential for Turkey’s largest companies. If the aim is being a value investor and keeping company stocks at the price it deserves, this comes as the best indicator in global benchmarks.
Translation: Cem Cetinguc