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 ?
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%
Where do you pull this information from? Goodness.
According to a very informed friend of mine, ACAS will be the highest paying dividend stock in the entire S&P 500. In fact ACAS will beat the closest dividend by 2%. That will draw folks to this stock like flies to honey.
Folks looking for regular income will be joining us. Folks who would have never thought to buy this stock will now be exposed to it.
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.