Index Inclusion Candidates

[valueventures]

Curious if anyone systematically tracks index inclusion candidates given their potential for forced passive buying as an immediate catalyst. Some of my positions that come to mind are KKR (candidate for S&P 500) and FFH (candidate for S&P/TSX 60).

 

Think this could be an interesting tool to filter for businesses that are becoming more "institutionally accepted", if you will.

[bizaro86]

I think SIRI will get added to a variety of smaller indices once the Liberty shares are spun off into the float.

[valueventures]

Some of my other candidates are SCR.TO (Fairfax holding and candidate for S&P/TSX 60) and IWG (potential US listing). Anyone have others?

[sleepydragon]

On 2/17/2024 at 4:04 PM, valueventures said:

Curious if anyone systematically tracks index inclusion candidates given their potential for forced passive buying as an immediate catalyst. Some of my positions that come to mind are KKR (candidate for S&P 500) and FFH (candidate for S&P/TSX 60).

 

Think this could be an interesting tool to filter for businesses that are becoming more "institutionally accepted", if you will.

there’s probably 20 different teams on wall st that are tracking this, including every Bank’s index team. These guys call S&P directly and ask their analysts all sort of questions and have a very good understanding how the process works. But rarely people guess the exact one.. you sort of know what are names are next, but it’s a long list.

 

[sleepydragon]

Cnhi will eventually get added soon

[SafetyinNumbers]

9 hours ago, valueventures said:

Some of my other candidates are SCR.TO (Fairfax holding and candidate for S&P/TSX 60) and IWG (potential US listing). Anyone have others?

When do you think SCR goes in the Composite?

[wisowis]

9 hours ago, valueventures said:

Some of my other candidates are SCR.TO (Fairfax holding and candidate for S&P/TSX 60) and IWG (potential US listing). Anyone have others?

 

Strathcona is 90.8% owned by Waterous funds. TSX60 is a float-adjusted index. If you adjust Strathcona's market cap excluding shares owned by Waterous, it has only a float-adjusted market cap of $575 million. Certainly that would be way too small for the TSX60 (notwithstanding the fact that, even if they were large enough, Energy already comprises 17% of the index (second largest component) and they would unlikely be looking to make it more heavily weighted towards Energy).

[SafetyinNumbers]

11 minutes ago, wisowis said:

 

Strathcona is 90.8% owned by Waterous funds. TSX60 is a float-adjusted index. If you adjust Strathcona's market cap excluding shares owned by Waterous, it has only a float-adjusted market cap of $575 million. Certainly that would be way too small for the TSX60 (notwithstanding the fact that, even if they were large enough, Energy already comprises 17% of the index (second largest component) and they would unlikely be looking to make it more heavily weighted towards Energy).

It’s not even in the Composite yet. My guess is they buy a smaller component of the index for stock once it rerates and back their way in. The 60 add won’t come until Waterous can dilute themselves down and do a few secondaries.