23
Smallcaps and microcaps in the S&P 500 index
Topics: macroThe S&P 500 index is the most widely-followed stock index in the world. Because it is supposed to consist of “500 leading companies in leading industries of the U.S. economy” (see fact sheet pdf), the S&P 500 is widely replicated by ETFs, passive mutual funds, and institutional investors. According to the fact sheet, S&P 500 member companies generally have market capitalizations “in excess of $5 billion,” and the smallest company in the index when the fact sheet was last updated had a capitalization of $1.3 billion.
How times have changed. Forget the $5 billion threshold — many companies in the index now have market capitalizations under $1 billion. According to the basic screener on Yahoo! Finance, these are now the smallest companies in the S&P 500 (as of 11/21/2008):
|
AK Steel Holdings (NYSE:AKS) |
$696.83M |
|
Apartment Inv. & Mgmt. Co. (NYSE:AIV) |
$812.08M |
|
American Capital Strategies (Nasdaq:ACAS) |
$917.90M |
|
CB Richard Ellis Group (NYSE:CBG) |
$714.91M |
|
Centex (NYSE:CTX) |
$684.82M |
|
CIT Group (NYSE:CIT) |
$522.46M |
|
Convergys (NYSE:CVG) |
$535.58M |
|
Ciena (Nasdaq:CIEN) |
$521.01M |
|
Developers Realty (NYSE:DDR) |
$330.75M |
|
E*Trade Financial (Nasdaq:ETRD) |
$484.01M |
|
Genworth Financial (NYSE:GNW) |
$389.70M |
|
Harman Int’l Industries (NYSE:HAR) |
$698.86M |
|
JDS Uniphase (Nasdaq:JDSU) |
$476.91M |
|
Jones Apparel Group (NYSE:JNY) |
$244.36M |
|
KB Home (NYSE:KBH) |
$718.78M |
|
Lennar (NYSE:LNR) |
$584.46M |
|
Liz Claiborne (NYSE:LIZ) |
$169.66M |
|
MBIA (NYSE:MBI) |
$978.37M |
|
Manitowoc (NYSE:MTW) |
$630.90M |
|
Meredith Corp. (NYSE:MDP) |
$571.18M |
|
NY Times (NYSE:NYT) |
$765.85M |
|
Office Depot (NYSE:ODP) |
$467.31M |
|
Prologis SBI (NYSE:PLD) |
$798.46M |
|
Tenet Healthcare (NYSE:THC) |
$577.15M |
|
Teradyne (NYSE:TER) |
$530.86M |
|
Wyndham Worldwide (NYSE:WYN) |
$535.52M |
All of these companies will likely be deleted when the index is reconstituted. Might be time to reread one of my favorite trading books, Trade Like a Hedge Fund. If I recall correctly, that book has a chapter describing a trading strategy based on index deletions.
DISCLOSURE: No positions.
Found your post via the Google blogserach page, Good post, I like your writing style! :-) I’ve added microcapspeculator.net/ to my feed reader, and will be reading your posts from now on.