Platform Companies Outperform the Market

By Anais Concepcion

In the top right corner of the Applico homepage, just under ‘Contact Us’ there is a small ticker for the ‘Platform Index’. We took the 50 largest platform companies and tracked their stock price from January 2008 to June 2018 to test our hypothesis that a platform index would outperform both the market and popular indexes like the Dow and S&P 500.

At a high level view, our hypothesis was confirmed beyond even our best guess – the platform index beat other indexes soundly. However, this macro-level view doesn’t offer enough granular detail about how the stocks fair throughout any given year.

We decided to take a closer look at what happened to stocks on 2018 and compare an index of the 50  largest platform companies (weighted evenly) against the Dow Jones Industrial Average, The S&P 500, the NASDAQ Index, and the NYSE Composite.

Platform Index Stock Performed Best in 2018 as a Whole

We looked at the stock prices at the start of each quarter for 50 platform company stock and calculated a simple average. Based on that simple average we calculated the percent change in the platform index stock price over the course of 2018. While the market was down as a whole in 2018, our platform index lost 1.38% of its stock price, compared to -4.87% for the NASDAQ, -5.95% for the Dow, -6.89% for the S&P 500, and -11.77% for the NYSE composite.

Raw data from Yahoo! Finance. Analysis by Applico.

On a Quarterly Basis, Platform Index Is Still a Safer Bet

We decided to take our analysis one step further and see how the platform stock performance holds on a quarter-by-quarter basis. Here the platform index fluctuates between 1st and 2nd place, and slows down, without going into the negative, in the third quarter. We were most anxious to study how the platform performed in Q4, when Apple was free falling and other platform companies were still depressed after a lackluster Q3 earnings report. To our surprise, the platform index came in second with a -13.03% loss, which sounds bad but not as bad as the S&P 500’s -14.17% loss and NASDAQ’s -17.06% loss. The Dow outperformed the platform index with a -12.40% loss and the NYSE composite came in at -13.37%.

Raw data from Yahoo! Finance. Analysis by Applico.

We were also curious to see if platform stocks recover from dips faster than other indexes. Read our analysis of the 2015 Q3 dip here.

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