Investing

Huge Zacks Multi-Asset Index Rebalance Means Massive Buying for 5 Stocks

On the close next Tuesday, the Zacks Multi-Asset Income Index is set for a rebalance. What this means is the index will be changed to reflect reweighting allocations across the stocks that make up the index. It also means there will be some serious buying and selling on the last print Tuesday.

In a research note, the analysts at Cowen have calculated the buys and sells in the index based on the holdings in the Guggenheim Multi-Asset Income ETF (NYSE: CVY), which essentially mirrors the index and will rebalance. The Cowen analysts estimate there are 43 stocks rebalancing with greater than 50% of 10-day average volume. We screened the list for the five stocks that could see the highest amount of share count buying and had the highest percentage of volume increase over the 10-day average.

NexPoint Credit Strategies Fund (NYSE: NHF) will see an avalanche of buying on the rebalance. The Cowen team estimates the fund will see a buy order for 848,300 shares. That is an increase in the 10-day average volume of 329%. NexPoint Credit Strategies Fund is a closed ended fixed income mutual fund launched by Highland Capital Management. Shares of the fund closed Thursday at $7.87.

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Pimco Income Strategy Fund II (NYSE: PFN) is another income vehicle that will see a big buy order. Some 376,800 shares are expected to hit the buy tape on the close of trading. That represents a whopping 195% increase in the 10-day average volume. Pimco Income Strategy Fund II is a closed-ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management. The shares closed trading on Thursday at $10.24.

EnLink Midstream Partners L.P. (NYSE: ENLK) shareholders can expect some serious buying on the close on June 2. The Cowen team estimates that 275,200 shares of the energy company will change hands. That represents a 65% increase in the 10-day average trading volume. The company, through its subsidiary EnLink Midstream Operating, provides midstream energy services. The company provides gathering, transmission, processing, fractionation, brine and marketing services to producers of natural gas, natural gas liquids, crude oil and condensate. Shares closed Thursday at $24.81.

Genesis Energy L.P. (NYSE: GEL) is another energy master limited partnership (MLP) that will see significant buying on the close next Tuesday. Some 119,500 shares of the company are expected to be purchased, and that will represent an increase of 64% in the 10-day trading volume average. Genesis Energy is a diversified midstream energy MLP headquartered in Houston, Texas. Its operations include onshore and offshore pipeline transportation, refinery services, marine transportation and supply and logistics. The shares closed Thursday at $48.75.

Horace Mann Educators Corp. (NYSE: HMN) will see some significant buying on the close. The Cowen team estimates that 80.300 share of the stock will be purchased. That is a 78% increase in the 10-day average trading volume. Horace Mann Educators, through its subsidiaries, operates as a multiline insurance company in the United States. It underwrites and markets personal lines of property and casualty insurance, including personal lines automobile and homeowners insurance products; retirement annuities, comprising tax-qualified fixed and variable deposits; and life insurance. Shares closed most recently at $34.93.

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While it is no secret that these purchases will be made, it certainly will put a floor under these stocks. It also gives sellers a chance to have market-on-close sell orders in to match up with all the buying.

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