Investment Bank has highlighted possible candidates for inclusion in the S&P 500
Chipmaker Marvell Technology could be one of the candidates for inclusion in the S&P 500 / Photo: Remus Rigo / Shutterstock.com
Analysts of investment bank Stephens named the main, in their opinion, candidates for inclusion in the broad market index S & P 500, writes CNBC. Rebalancing of the index by the U.S. Index Committee should be held on Friday, the channel points out.
The bank highlighted companies that now meet the selection criteria set by S&P Global's S&P Dow Jones Indices division. Among the largest candidates ranked by size, Stephens noted shares of chipmaker Marvell Technology, data center infrastructure solutions provider Vertiv, Strategy, the largest public bitcoin holder, the owner of the Reddit forum network and biotech company Alnylam Pharmaceuticals.
S&P Global's choice may also be influenced by sector ratios, Stephens said. Currently, companies from the spheres of communication services and finance are underrepresented in the index compared to their market share, which increases the chances of Reddit, as well as fintech player SoFi Technologies. Investment bank analysts also paid attention to the securities of communications equipment manufacturer Ciena and technology company Coherent, which produces laser optics - both are included in the S&P MidCap 400 index, but have already "outgrown" it and can be "upgraded" to the S&P 500. Such transitions are almost always accompanied by significant capital inflows, CNBC writes.
Why it's important
Inclusion in the S&P 500 often causes stocks to rise - funds and investors targeting the index are forced to buy new securities, CNBC explains. Since quotes of companies added to the indexes often show strong dynamics after the announcement, investors closely follow them on the eve of the next rebalancing.
After the announcement of the inclusion in the S&P 500 of the developer of the application for advertising AppLovin, trading platform Robinhood Markets and engineering company Emcor Group in September, their shares in one session rose by 7.5%, 6.3% and 2.3%, respectively. At the same time, over the past three months, AppLovin rose only 0.5%, Emcor - by 1.4%, and the value of Robinhood collapsed by almost 20%.
This article was AI-translated and verified by a human editor
