S&P 500?

tpltblogger8 Comments

Many have written to me to ask about index inclusion. I’m no expert, but here are some resources:

Hot off the press: Unadjusted market cap minimum for the S&P500 is $11.8B

$11.8B / 7,756,156 shares (is it bad that I that number by heart?) = $1,521.37

S&P500 overview

To be eligible for S&P 500 index inclusion, a company should be a U.S. company, have a market capitalization of at least USD 9.8 billion, be highly liquid, have a public float of at least 10% of its shares outstanding, and its most recent quarter’s earnings and the sum of its trailing four consecutive quarters’ earnings must be positive.

The committee meets monthly. At each meeting, the Index Committee reviews pending corporate actions that may affect index constituents, statistics comparing the composition of the indices to the market, companies that are being considered as candidates for addition to an index, and any significant market events.

Index methodology

Liquidity.
• S&P Composite 1500. Using composite pricing and volume, the ratio of annual dollar value traded (defined as average closing price multiplied by historical volume over the last 365 calendar days) to float-adjusted market capitalization should be at least 1.00, and the stock should trade a minimum of 250,000 shares in each of the six months leading up to the evaluation date.

With 252 trading days, the stock needs (1.00 / 252) = 0.4% of shares traded per day on average. See last post for more context on that.

Again, not an expert but it seems like TPL is on its way. Poke holes in the comments! Not trying to spike the football on the current run. As a long time investor, being back to $900 next week would not shock me. This stock jumps. But over the long run, will it get into the 500?

8 thoughts on “S&P 500?”

  1. This is certainly something to watch. The other big thing to watch is other ETF ownership. There only a few small ETF’s that own this and that will likely change due to to corporate structure change. This has no real position in index funds or actively managed ETF’s currently.

    Like

    • johnphe TPL was actually recently included in HK’s new actively managed ETF INFL as the largest holder at ~8%. Would be great to see further inclusion in more index and ETF.

      Like

  2. Didn’t think of that. Possible inclusion in the S&P 500 might be behind the recent crazy jump. Has all the attributes to qualify for inclusion, in which case it could to even more lunatic heights (temporarily)

    On Thu, Mar 18, 2021 at 3:52 PM The Texas Pacific Land Trust Investor wrote:

    > tpltblogger posted: ” Many have written to me to ask about index > inclusion. I’m no expert, but here are some resources: Hot off the press: > Unadjusted market cap minimum for the S&P500 is $11.8B $11.8B / 7,756,156 > shares (is it bad that I that number by heart) = $1″ >

    Liked by 1 person

  3. I only own about 10 stocks and due to the recent runup, TPL makes up like 20% of my portfolio now. That puts me in the position of having to decide if that is enough or if I should add more because of future prospects.

    Liked by 1 person

Comments are closed.