Investing
5 Stocks Set to Score From MSCI Index Rebalancing
November 13, 2020 10:45 am
Last Updated: May 10, 2021 7:31 am
Most experienced investors are well aware of the major indexes that compose the equity markets. In the United States, the three main indexes are very familiar: the Dow Jones industrial average, the S&P 500 and the Nasdaq 100. However, among the most closely tracked groups of indexes by institutional investors and portfolio managers are the MSCI indexes.
MSCI is a leading provider of research-based indexes and analytics, and it has announced the results for the MSCI Equity Indexes additions and deletions, including the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indexes, the MSCI Global Value and Growth Indexes, the MSCI Frontier Markets, MSCI Frontier Markets Small Cap Indexes, the MSCI Global Islamic and MSCI Global Islamic Small Cap Indexes, the MSCI Pan-Euro and MSCI Euro Indexes, the MSCI US Equity Indexes, the MSCI US REIT Index, the MSCI China A Onshore Indexes and the MSCI China All Shares Indexes. All changes will be made as of the close of November 30, 2020.
The indexes are rebalanced twice a year, and at the end of November, a huge rebalance is set to occur. That means some major buying in some very well-known companies. We screened for the five top U.S. stocks that are new additions that should get a major buying push, and all make sense for aggressive growth investors.
We have listed the five in order of the numbers of net shares to trade, and all are rated Buy at top Wall Street firms. It is important to remember, though, that no single analyst report should be used as a sole basis for any buying or selling decision.
This may be a great play for more speculative investors looking for health care ideas. Horizon Therapeutics PLC (NASDAQ: HZNP) focuses on researching, developing and commercializing medicines that address unmet treatment needs for rare and rheumatic diseases in the United States and internationally.
The company’s orphan and rheumatology marketed medicines include the following:
Last January the U.S. Food and Drug Administration (FDA) approved Tepezza (teprotumumab-trbw) for the treatment of adults with thyroid eye disease, a rare condition where the muscles and fatty tissues behind the eye become inflamed, causing the eyes to be pushed forward and bulge outward. The approval represented the first drug approved for the treatment of thyroid eye disease.
BofA Securities has a $101 price target on the shares, which is in line with the Wall Street consensus target of $100.67. Horizon Therapeutics stock traded at $74.45 on Friday, and 3,621,582 net shares are expected to trade.
The company became a huge favorite with younger people due to the surge in popularity of fantasy football. DraftKings Inc. (NASDAQ: DKNG) operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
The company entered the market back in April in a time when most companies were putting off their initial public offerings. The offering was not an IPO in the truest sense because DraftKings came public through a merger with a special purpose acquisition company called Diamond Eagle, but similar rules applied.
The stock was hammered after a big move and is offering aggressive investors an incredible entry point. Top Wall Street analysts feel that sports betting should accelerate after the pandemic and the market for sports betting in the United States could reach $19 billion by 2023 to 2025. They also expect that in 2021 and beyond, engagement with digital leisure, pent-up appetite for sports and political realities should position DraftKings to accelerate.
DraftKings reported outstanding third-quarter results this morning. Revenue came in at $133 million, an increase of 98% from the same period in 2019. The company raised its fiscal year 2020 pro forma revenue guidance from a range of $500 million to $540 million to a range of $540 million to $560 million, which equates to year-over-year pro forma revenue growth of 25% to 30% in 2020, despite COVID-19’s impact on the major sports calendar.
Oppenheimer boosted its price target in October to $65 from $55. The consensus target is $58.11, and DraftKings stock was trading at $44.15. Look for 2,797,524 net shares to be traded.
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