Investing in Fortune 500 Companies: Louis Chenevert

Louis Chenevert made Strides at UTC with his Leadership Skills

It is a list most of us have heard about, but very few of us totally understand. The Fortune 500 is an annual list created by Fortune magazine. The magazine ranks the top 500 of the largest United States corporations based on total revenue for their fiscal year. The list also includes publicly and privately held companies that are doing the best financially. These are the companies that sell the most things that are essential to Americans.

Investing in Fortune 500 companies should always be considered strongly. But if you are not that familiar with stocks and the stock market, it can be a bit overwhelming. And sure you can go find someone to invest your money for you, but in doing so you are basically handing them the keys to the car and climbing into the backseat. Wouldn’t you rather take a more active role in your investing? Instead of totally trusting your money manager, head on into their facility with companies in mind that you would be interested in hearing about.

Let’s first simplify a couple things for people that are not that accustomed to investing. Stocks allow you to own a portion of a public corporation. In the beginning, they are sold by the owners of the company in an effort to make their companies grow quickly. So when you buy stock in a company, it basically means that you have a bit of ownership in it. When you buy more stocks, you gain an even larger percentage of ownership.

Questions About Investing

The Fortune 500 list might be a good one to read over thoroughly when deciding which companies to invest in. There are certain things to consider, though, when choosing the companies. You definitely don’t want to just choose the top ten and go with them. There has to be a bit of thinking involved. Do the research needed to make educated decisions.

Consider which companies have repeatedly been on the Fortune 500 list. United Technologies Corporation (UTC) has made the list 23 times and is currently ranked number 50 for 2017. They made some huge gains on the list quickly under Louis Chenevert. In 2008, he was elected the president and chief operating officer for UTC.

UTC is a company that is headquartered in Farmington, Connecticut They have their hand in numerous industries. Some of the most popular include aircraft engines, aerospace systems, HVAC, elevators and escalators, fire and security, building systems, and industrial products. While they do business with the public sector, they also do it with the private sector. UTC has several large military contracts and receives about 10 percent of its revenue from the US government. Having contracts with the US government is definitely a bonus. The public sector can fluctuate depending on the economy, the US government will keep on spending money without any regard to the economy.

When Chenevert took over in 2008, he brought with him an energy and ideas on moving forward in the future for UTC. He transformed UTC into a global juggernaut. When investing in a company, doing your homework and finding out this information is key. UTC sounds like an excellent choice to invest in. Nevertheless, if you research a bit more, you will find out that Chenevert unexpectedly retired in 2014. While they are still doing well, there is a different leader in place. These are all things to consider.

Companies to Invest In

In doing the research needed for investing, you might decide to take a look at the largest gains made during the past year on company stocks. For the year 2016, these companies made some of the biggest gains on the Fortune 500 list.

AK Steel Holding is ranked number 383 from the Fortune 500 list. You may be thinking that while being on the Fortune 500 list is an accomplishment, why should you be excited about a company that was ranked 383. You should be thrilled because their stock went up 359 percent! The last few years, they have taken losses though. For 2016, they should be turning a definite profit. These are all things to consider. Should you buy while the stock is pretty high or do you just want to say that you missed the boat on this one?

Fannie Mae is a federal national mortgage association. They are ranked number 16 on the Fortune 500 list for the year 2016. Their stocks also went up 140 percent during that time. That means that if you were already invested in them, you more than doubled your money last year. In 2013, Fannie Mae’s stocks were up an incredible 1,000 percent. Those are crazy numbers. Then the next year after that, they nosedived into one of the worst stocks when the government suggested they would start to phase them out. However, just like all things the government says, don’t totally believe them.

There is a reason that people always proclaim that everyone should invest in gold. It is a precious metal, and there is less and less of it being discovered every day. Freeport-McMoRan was ranked 175 on the Fortune 500 list for 2016. Their return was 106 percent, so they slightly more than doubled whatever you had invested in them. Their company deals with precious metals, including gold, copper, and silver. A few years back, they even diversified more by going into the oil business. Their stock would definitely be one to research a bit more.

Get a Jump on the Future

All of the stocks listed above had a great 2016. Does this mean it will continue in the years to come? Possibly. But if you are purchasing stocks from their company, you are paying a premium right now. Look to the future and try to find a company to invest in where the stocks are currently low in price. One area that several companies are investing heavy in right now is the driverless car arena.

These cars are predicted to be offered to the public right around 2020 or so. This gives you a bit of time to still find a company to invest in if you think the driverless car will really take off. The two companies leading the way currently are Tesla and Ford. Might want to check them out soon!

Haley Thompson

About Haley Thompson

Haley is a journalist with over 10 years of experience in the field. She has held many editorial roles at a number of high-profile publishers – both offline as well as online.

View all posts by Haley Thompson →