Key Takeaways:
SharkNinja Inc. (NYSE: SN) shares jumped 5% in after-hours trading after S&P Dow Jones Indices announced the home appliance maker will be added to the S&P MidCap 400 index, effective before trading opens on May 18. The inclusion is a significant milestone for the company, exposing its stock to a wider range of investors, including passive funds that track the mid-cap benchmark.
"Index inclusions typically generate buying activity from funds that track these benchmarks, as portfolio managers adjust their holdings to match the index composition," Investing.com noted in a report on the changes. This forced buying from passive exchange-traded funds and index funds often provides a short-term boost to newly included stocks as managers must purchase the shares to align their portfolios with the updated index.
As part of the rebalance, SharkNinja will replace Flowers Foods Inc. (NYSE: FLO) in the MidCap 400. Flowers Foods, a packaged bakery goods company, will simultaneously move to the S&P SmallCap 600. The change also lifted Flowers Foods' stock, which gained 1.4% in post-market trading on the news of its new index placement.
The broader index shuffle stems from pending acquisitions. Flowers Foods will replace CSG Systems International Inc. (NASD: CSGS) in the small-cap index, as CSG is being acquired by NEC Corporation. In a separate change effective May 19, F&G Annuities & Life Inc. (NYSE: FG) will join the S&P SmallCap 600, replacing Mister Car Wash Inc. (NASDAQ: MCW), which is being bought by private equity firm Leonard Green & Partners L.P. F&G shares rose 3% on the news.
This article is for informational purposes only and does not constitute investment advice.
