Home / Business and Economy / Carvana, CRH, Comfort Systems Join S&P 500 Elite
Carvana, CRH, Comfort Systems Join S&P 500 Elite
6 Dec
Summary
- Three companies are set to join the S&P 500 in late December.
- Carvana's stock surged over 7% after the S&P 500 inclusion news.
- Index inclusion boosts stock demand due to passive investing growth.
The S&P 500 index is set to welcome three new members: CRH Plc, Carvana Co., and Comfort Systems USA Inc. These companies will be integrated into the benchmark index at the close of trading on December 22nd, replacing LKQ Corp., Solstice Advanced Materials Inc., and Mohawk Industries Inc. The news prompted immediate positive reactions in the market, with Carvana and CRH experiencing substantial stock price increases in post-market trading, while Comfort Systems also saw gains.
This inclusion marks a significant achievement for Carvana, a used car retailer. The company has demonstrated an extraordinary recovery, with its stock price soaring from a low of less than $4 in 2022 to around $400 currently. This impressive performance is attributed to successful cost-cutting measures and debt restructuring, leading to improved earnings and record vehicle sales in the last quarter.
The growing prevalence of passive investing has heightened the significance of being part of major indices like the S&P 500. Funds tracking these benchmarks increase their demand for constituent stocks, thereby influencing share prices. Companies seeking S&P 500 inclusion must meet stringent criteria, including a market capitalization of at least $22.7 billion and adherence to profitability, liquidity, and share-float standards.
