Last week, all three major U.S. stock indexes plunged. It fell about 10 per cent in two days on September 4th and 5th, the third sharp drop since the index plunged 4.41 per cent on April 1st and 5.27 per cent on June 11th. On September 2nd, the S.P. 500 and Nasdaq composite indexes hit record highs, and the Dow returned above the 29,000-point level for the first time since February. The sudden plunge in U.S. stocks has alarmed many investors.
Despite the turmoil in U.S. stocks, the S. and P. 500 index, one of the top three U.S. stock indexes, has begun a new round of index adjustment. On September 4th the Dow Jones Indices announced that three stocks would be officially included in the index before the September 21st opening.
On this “promotion” list, the highly anticipated Tesla unexpectedly “lost”, why did Tesla, which qualified for the Standard and Poor’s 500 index, fail to make the cut? Why did the three newly selected companies, Etsy, Teradyne and Catalent, have the honor of being in the top position?
Tesla regrets lying down on the S.P. 500.
U.S. companies must meet these criteria if they are to be included in the Standard and Poor’s 500 Index: companies must be located in the U.S. and listed on the New York Stock Exchange, Nasdaq or Chicago Board Options Exchange, have a market capitalization of more than $8.2 billion, and must make a fourth consecutive quarter of earnings in accordance with U.S. GAAP.
Tesla’s share price also continued to rise after the company reported better-than-expected net profit after its second-quarter results on July 23. With Tesla’s fourth consecutive quarter of earnings, it has met the key conditions for inclusion in the S.P. 500, and many investors have speculated on the stock based on expectations of being included in the S.P. 500.
Tesla’s share price plunged after the market slumped on the back of the loss of the Standard and Poor’s 500-stock index and a plunge in the U.S. stock market. Tesla’s shares were trading at $391.33 in after-hours trading Friday, down 6.45 percent to a market capitalization of $389.794 billion.
Why did Tesla fall out of the S.P. 500? In the view of the U.S. stock research agency may be affected by these factors. On the one hand, being eligible doesn’t mean Tesla is 100 percent likely to be selected. Howard Silverblatt, a senior index analyst at S.P. Dow Jones Indices, said before Tesla’s results that even if a company met both market capitalization and earnings criteria and other requirements, there was no guarantee that the company would be included in the index.
In essence, on the other hand, Mr Klass is concerned that The money Tesla makes from its core business may still be too little or potentially too volatile for the S. and P. Dow Jones to accept. At the profit level, Tesla’s profits are not primarily made by selling cars, but by selling government-subsidized carbon emissions targets to other companies, making huge profits that won’t be there every year for a long time.
Judging by both factors, Tesla’s defeat of the S.P. 500 was no surprise, but raised expectations of Tesla’s selection amid “speculation” from some investors. What are the reasons why the three newly selected companies are in the S.P. 500?
The three newly selected companies are “attractive”
This time, etsy, an automated test equipment supplier, and Catalent, a pharmaceutical company, will be included in the S. and P. 500 index to replace tax service providers H. R Block, cosmetics group Coty and department store Kohls. What are the advantages behind the selection of these three new companies?
First, Etsy excuse cover hot wind into e-commerce bull stocks.
Etsy is an online website in the United States that sells handmade crafts, and it brings together a large number of influential and appealing art designers. Etsy’s share price has been on a record high since May. From 60 to 70 to 80, the stock price has now come to $112. Etsy’s shares were trading at $118.43 on Friday and had a market capitalisation of $13.369 billion.
This year, the U.S. Centers for Disease Control and Prevention (CDC) began recommending people to wear masks, and many people who could not buy scarce goods began to try homemade masks, and Etsy’s side saw monthly sales double. Throughout April, Etsy sold more than 12 million masks. As the second largest category of goods in the month, total sales were approximately $133 million.
According to Etsy’s second-quarter results, core data performance has been recognized by many investors. Net profit attributable to common shareholders of the parent company in the second quarter of fiscal 2020 was $96.425 million, up 429.4% YoY, while operating income was $429 million, up 136.75 percent YoY.
Etsy’s revenue revolves around the user’s shopping process on the site, from the seller薅 wool. It is divided into two parts, including market revenue and service income. With simpler registration processes, lower commissions, no monthly fees, looser rules on making goods and self-promotion , it’s limited to active sellers, which allows Etsy to survive by avoiding Amazon’s competition.
Etsy’s ability to be included in the S. and P. 500 index may be due to the impact of good global e-commerce dividends, while the current U.S. epidemic is still not improving, consumer demand for masks is still there, which will also benefit Etsy’s performance growth.
Shares of Thadyne rose on the back of a rebound in chip spending.
Tyrida is a world-renowned supplier of automated test equipment. Tyrida’s test products are mainly used in semiconductors, board testing, acoustics, broadband telephone network manufacturers. Teradyne’s shares are up nearly 13 per cent so far this year. So far, Teradyne closed Friday at $78.60, 000, 33 billion U.S. dollars.
Teradyne, which sells advanced test equipment for semiconductors and wireless devices, ranks 48th on the IBD 50’s list of the best performing growth stocks. It also has an unparalleled overall rating of 99, a near-perfect earnings per share rating of 98 and a solid RS rating of 90.
Profits have grown by an average of 44 per cent over the past three quarters, well above the three-year average of 17 per cent. Sales growth has also accelerated in the last two quarters. Chip device makers typically have big ups and downs in earnings and sales, but Teradyne’s earnings and sales growth are relatively stable.
The company reported second-quarter net income of $188.9 million, or $1.05 per share, compared with $97.4 million, or 55 cents per share, a year earlier. Adjusted earnings were $1.33 per share, compared with 66 cents per share a year earlier. Revenue rose to $838.7 million from $564.2 million a year earlier.
Third, biotechnology “epidemic” external good Catalent.
U.S. biotech companies have been favored by capital markets this year because of the outbreak. Biotech companies listed in the US have raised about $9.4bn through initial public offerings this year, according to Dealogic, a US institution. That’s more than the $6.5 billion for all of 2018, a record high.
Catalent is the world’s leading provider of advanced administration technologies and manufacturing solutions for pharmaceuticals, biologics, gene therapies and consumer health products. With more than 40 facilities worldwide and employing nearly 135,000 people, including more than 2,400 scientific professionals, Catalent generated annual revenue of more than $2.5 billion in fiscal 2019.
Catalent is up nearly 48% so far this year. So far, Catalent had a market capitalization of $13.779 billion at $84.98 on Friday.
Through its broad capabilities and deep expertise in product development, the company helps customers bring the products they need to market faster, with nearly half of the new drugs approved by the U.S. Food and Drug Administration (FDA) in the past decade.
According to Catalent’s last-quarter results, the company also showed strong growth. The announcement showed that Caterent’s annual net profit attributable to common shareholders of the parent company for fiscal 2020 was $173 million, up 25.91 percent year-on-year, and operating income was $3,094 million, up 22.89 percent year-on-year.
Many biotech companies are actively developing vaccines against new crowns, and many investors believe the pharmaceutical industry may benefit from government investment in the discovery and development of new crown drugs.
Since the beginning of the year, the Dow Jones has added at least 10 companies, and the U.S. stock market is adept at taking the initiative to “spoil”, a proactive measure that also gives U.S. companies a greater sense of urgency. Although Tesla was turned away this time, there is still some opportunity to follow, the most critical is to see if it can maintain a stable profitability.