Editor's Note: This article was prepared by Standard & Poor's Index Services, which is separate from S&P Equity Research.
On Sept. 7, Standard & Poor's released a list of 300 midsize companies that are expected to emerge as challengers to the world's leading blue-chip companies. Called the S&P Global Challengers, the list comprises those publicly traded companies that show the highest growth characteristics along dimensions encompassing intrinsic and extrinsic growth. S&P will publish the list on an annual basis and will track its performance.
The S&P Global Challengers List is based upon a robust methodology that applies consistent standards to multiple countries. The attributes used to identify the companies are share-price appreciation, along with growth in sales, earnings, and employees. The 2006 class of S&P Global Challengers includes companies from 32 countries and 10 sectors.
"In the Darwinian sense, midsize firms are truly positioned in an evolutionary sweet spot, having survived beyond their startup phases and offering stability as well as rapid growth opportunities in the future," says Srikant Dash, Index Strategist at S&P. "The class of mid-caps offers the best potential pool of companies, which could indeed be tomorrow's leaders."
To invest in the list, S&P also launched the S&P Global Challengers 40 index, a highly liquid and investable subset of the broader S&P Global Challengers List. The index is an equal-weighted portfolio of the 40 fastest growing stocks with representation from around the world. Here are the members of the index (stocks without tickers do not trade on U.S. exchanges):