Investing

5 Stocks Set to Score From MSCI Index Rebalancing

Cloudflare

This off-the-radar cybersecurity pick has big potential upside in a red-hot industry, and it could be a potential takeover target. Cloudflare Inc. (NYSE: NET) provides an integrated cloud-based security solution to secure a range of combinations of platforms, including public cloud, private cloud, on premise, software-as-a-service applications, and Internet of Things (IoT) devices.

Cloudflare’s security products include Cloud Firewall, Bot Management, Distributed Denial of Service, Infrastructure Protection, IoT, SSL/TLS, Secure Origin Connection and Rate Limiting. The company also offers performance solutions, which include Content Delivery, Intelligent Routing, and Mobile Software Development Kit, as well as Content, Mobile, and Image Optimization.

In addition, the company provides Reliability solutions, comprising Load Balancing, Anycast Network, Virtual Backbone, DNS, DNS Resolver and Always Online. Further, the company provides solutions to protect an organization’s internal resources, such as devices, users, applications and data, comprising Zero Trust Security and Access Management, which secures, authenticates and monitors user access to internal applications and infrastructure hosted on-premise or in cloud environments, as well as Secure Web Gateway to secure and filter outbound internet traffic to protect employees from threats on the public internet and to help protect internet-browsing employees from bringing malware or vulnerable code into an organization.

The $70 Jefferies price objective was lifted to $80, and the consensus target is $66.07. Cloudflare stock traded at $63.95 on Friday, and 2,534,161 net shares are slated to trade.

Ceridian HCM

This is yet another off-the-radar stock that has been on fire, exploding off the September lows. Ceridian HCM Holdings Inc. (NYSE: CDAY) operates as a human capital management (HCM) software company in the United States, Canada and internationally.

The company offers Dayforce, a cloud HCM platform that provides human resources (HR), payroll, benefits, workforce management and talent management functionality, as well as Powerpay, a cloud platform that offers scalable and straightforward payroll and HR solutions. It also provides Bureau solutions for payroll and payroll-related services. The company sells its solutions through its sales force and third-party channels.

Needham’s recently lifted target price of $105 compares to a consensus figure of $93.93. Of Friday, shares traded at $95.00. Some 2,182,170 net shares are expected to be traded.

PPD

This is an outstanding play for biotech investors looking for a solid but perhaps less volatile alpha idea. PPD Inc. (NASDAQ: PPD) provides drug development services to the biopharmaceutical industry worldwide and seeks to help customers accelerate the development of safe and effective medicines and maximize returns on their research and development investments.

The company operates through Clinical Development Services and Laboratory Services segments. It offers clinical development services, including product development and consulting, early development, Phases 2 to 4 clinical trial management, accelerated enrollment, peri- and post-approval and medical communications services.

PPD also provides laboratory services comprising bioanalytical, biomarker, vaccine science, good manufacturing practice and central laboratory services. It serves pharmaceutical, biotechnology, medical devices and government organizations, as well as other industry participants.

Truist Securities initiated coverage in October with a $42 price objective. The consensus estimate is $39.87, and shares were trading at $34.25. Some 2.005,285 net shares are expected to trade.


It is important to remember that while millions of net shares are expected to trade for the new additions, in at least two cases, they trade many shares more on an average daily volume basis. Still, the addition to the MSCI indexes, and those that are run by companies that mimic the indexes, is always a positive.