Welcome to Extreme Investor Network, where we bring you the latest insights and analysis on all things investing. Today, we’re diving into the exciting world of stock market indexes and the potential additions to the prestigious S & P 500 index.
According to Wall Street analysts, there are several stocks that could be poised to join the S & P 500 during its quarterly rebalance next month. Inclusion in the index comes with major benefits, with newly added names historically experiencing an average 7.7% upside on the first trading day. Super Micro Computer and Deckers Outdoor were the most recent additions in March, replacing Whirlpool and Zions Bancorporation.
One contender for a spot in the S & P 500 is Block, a payments company that became eligible after reporting positive net income in the fourth quarter of 2023. While inclusion is not guaranteed, Barclays analyst Ramsey El-Assal believes that Block “screens well” due to the underweighting of financial services in the index. This underrepresentation makes Block a likely candidate for inclusion, especially considering its $45B market cap.
Analyst Shreyank Gandhi from Keefe Bruyette & Woods also believes that financial services stocks like Square and Coinbase could be potential “wild card” entries in the S & P 500. Additionally, he sees Dell as the most likely name to join due to its size. Other possible additions include KKR and Apollo Global Management, with a “mid to high probability” that Erie could also join the index.
But the S & P 500 is not the only index undergoing potential changes. Gandhi predicts that Ryan Specialty Holdings may join the S & P Midcap 400, while New York Community Bancorp could drop down to the S & P SmallCap 600. Axis Capital Holdings and BOK Financial are also potential candidates to join the S & P SmallCap 600.
The rebalance is set to take place after the close on June 21, with changes being announced on June 7. Stay tuned to Extreme Investor Network for all the latest updates on these potential index changes and how they could impact your investment strategy. Happy investing!
