The S&P stock committee became more active in adding and removing companies from its indexes in the mid 1990s and, in the process, has become an excellent contrarian indicator. In their attempt to be up-to-date and representative of the "current economy," the S&P committee has also fallen into the trap of adding overvalued stocks and removing undervalued, out of favor stocks. The current changes continue the trend with the addition of a REIT and a super cyclical for an airline stock. The committee also added another homebuilder to the S&P 500.
Standard & Poor’s will make the following changes to the S&P 500, S&P 100 and S&P SmallCap 600 indices after the close of trading on Thursday, August 18:
* S&P REIT Composite constituent Public Storage Inc. (NYSE:PSA – News) will replace Delta Air Lines Inc. (NYSE: DAL – News) in the S&P 500. At the close of trading on August 15 Delta had a market capitalization of roughly $200 million, ranking 500th in the index. Caterpillar Inc. (NYSE: CAT – News) will replace Delta in the S&P 100.
* M/I Homes Inc. (NYSE: MHO – News) will replace Accredo Health Inc. (NASD: ACDO – News) in the S&P SmallCap 600. Accredo is being acquired by S&P 500 constituent Medco Health Solutions Inc. (NYSE: MHS – News) in a deal that is pending final approvals.
Accredo is being acquired by S&P 500 constituent Medco Health Solutions Inc. (NYSE: MHS – News) in a deal that is pending final approvals.