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American Capital, Ltd. Message Board

  • dienerofli dienerofli Jul 3, 2007 9:54 AM Flag

    You, me - - let's make some MONEY !!

    Question: over the long term, what impact does ACAS being added to the S & P 500 have on its stock price (2 %, 5 %, more ?) and why ? Does it have a bigger impact the day after the announcement as big player need to add it to their psoitions and there is much more buying pressure than selling ? Is their evidence from the academic world that tells us what to expect on average the day after the announcement in percentage terms and then in the longer term ?

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    • ACAS -
      being in the S & P 500 -
      will mean more exposure - much more .
      exposure will have more funds & investors to be
      having a look & checking it out.
      this can't be anything but good for the stock.
      now all they have to do - is - keep making good
      deals and keeping their nose and balance sheet clean.

    • The consensus appears to be that there will be a short-term price pop, but the inclusion in the S&P also means there will be increased volatility. Increased volatility implies buyers will want a greater risk premium which might be a lower p/e or, with ACAS, as higher dividend rate.

      But, whenever a study of this sort takes place they present the average or median result which overlooks the obvious point that 50% of the results were better than the median and 50% were worse.

      Obviously ACAS will continue to trade on fundamentals once the dust settles, so we�ll be in the upper 50%

 
ACAS
15.20+0.01(+0.07%)Apr 17 4:00 PMEDT