S&P500 Inclusion: Rolling Thread? (Page 1 of 2)
Posted: 2/6/2025 7:48:53 PM EDT
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So just a thought as Procat has brought some great energy to this forum regarding the S&P500 exclusion and inclusions. Any top 3 on the horizon to be included or excluded for the next go round? What is the usual timing cycle for chatter, candidacy and announcement? Solid plays historically on this topic. |
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Last time I played around with Fidelity’s stick screener there were around 100 tickers that were technically eligible but weren’t on the list. One thing I have noticed is that just meeting the requirements isn’t enough: -Minimum market cap should be exceeded to a point where a good pullback won’t put it back under that number. -GAAP profitability for 4 quarters usually ends up being more like 6-8 -Look at institutional ownership, they seem reluctant to add companies before big money starts building positions. (This was speculated to have been an issue with PLTR’s addition) I’m confident HOOD will get in this year. There’s lots of hype about SOFI getting in but it wouldn’t surprise me if it took a while longer for them. |
Quarterly announcement is this Friday after the bell. Around the 1:00 mark in this video the topic comes up. Pretty good case is made for HOOD getting in before COIN.  Should You Buy HOOD Stock Before Earnings? | Robinhood Weekly |
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Here’s a question for everyone following along; what happens when a company is included that already has high institutional ownership? The common opinion is that they won’t experience as large of a bump because the major players already hold a lot. I had a realization the other day that the exact opposite could be true. Using HOOD as an example their institutional ownership currently sits around 75% which is considered high. By comparison institutions are credited with owning 80% of the S&P 500. Looking at the holders it’s the usual suspects: Vanguard, State Street, Blackrock, ect and within that it’s a mix of various growth funds. What happens when the stock gets included and the index funds at those same firms have to build a position based on their weighting? Do the growth funds managers just hand the shares over to the index tracking fund managers in an off market deal? Seems like that would be screwing holders of the growth fund. Genuinely curious as I’ve never followed this process on a ticker that already had such high institutional ownership. If the S&P tracking funds have to buy in the open market and 75% of the shares are effectively not for sale I could see the pop on inclusion being even bigger than normal. Thoughts? |
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Originally Posted By SkiandShoot: Is it too much pressure to put it out there for "Procats next 3 picks" game? Short answer yes. I have tickers I follow closely and generally don’t pay much attention to others. S&P predictions are also complicated by the fact that inclusions and removals are not automatic based on their own standards but instead are voted on by a committee. In the past they’ve shown a bias against tech companies, probably in an effort to keep the index from getting too heavy in that sector. The lead up to Palantir’s inclusion was a good example of this. In the past using a stock screener with S&P’s own criteria resulted in 100+/- companies that should be in the index. If you upped the market cap requirement to a reasonable margin of safety you could get the number down to 20 or so. From what I know of their selection process and the companies I follow all I can say is that I feel good about HOOD getting included in the next few cycles and there is a strong case for them getting in before COIN or SOFI. |
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Looks like S&P made an unscheduled addition due to one of the component companies being acquired. Coinbase replacing Discover Financial |
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Originally Posted By Procat: Looks like S&P made an unscheduled addition due to one of the component companies being acquired. Coinbase replacing Discover Financial This is one of the more interesting developments. I bought COIN pre-market. Been a long time since I have done that. US index investors will now have Bitcoin exposure. |
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The June announcement is this Friday after the close. So far I’m not seeing any articles or videos speculating on additions / deletions. Google’s AI overview is proving to be worthless as it keeps suggesting names that have already gotten in. I’m assuming that’s just because it’s reading outdated articles in the topic. HOOD is still at the top of my list for inclusion. I must not be alone because the call premiums for next Friday’s expiration are wild while the put premiums look pretty normal. |
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I asked Grok what stocks were being discussed as possible inclusion candidates. MSTR was indeed mentioned, but the rule change they have adopted while it helps hasn’t made them GAAP profitable. Maybe soon, if Bitcoin rallies. Others mentioned were HOOD, SOFI, SQ, APP, with an honorable mention for MSTR. Grok could definitely become a crutch for my failing memory. |
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Article on the thesis that HOOD is a likely candidate, throws out some other names too. Played around with Fidelity’s stock screener a bit, came up with 15 names pretty quickly, some also were in the Yahoo Finance article: LNG SCCO FERG IBKR LPLA VEEV ARES TTD CVNA VRT TW DDOG CPNG APP HOOD APP has the biggest market cap of the lot. APP, DDOG & TTD are already in the Nasdaq 100. Was surprised to see CVNA on the list as last I heard of them they had serious money troubles. One thing I didn’t dive into was how long each name had been eligible, the S&P committee usually waits until a company has met all the requirements for at least several quarters. |
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Originally Posted By grendelbane: Just sold HOOD puts, gives me something to watch. Maybe they make it. Worse case scenario I’d just take assignment vs buying out of the contract if it came down to it. Hood is growing like crazy and the option premiums are consistently good. Just wheel it. |
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Originally Posted By Procat: Worse case scenario I’d just take assignment vs buying out of the contract if it came down to it. Hood is growing like crazy and the option premiums are consistently good. Just wheel it. HOOD is working out fine so far. Looking forward to the end of the week. |
Decent video on Friday’s S&P announcement. Names mentioned have already been brought up here but he touches on sector balance of the index and how that can affect the committee’s decision making.  Urgent: S&P 500 Inclusion Revealed – Don’t Miss This Before Friday EoD! |
This stream will have the announcement as soon as it hits the Bloomberg terminal.  DOES ROBINHOOD GET INTO THE S&P 500? |
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Originally Posted By SkiandShoot: Looked at Applovin. Just couldn't get excited when their destiny runs through a third party for the down stream impacts (iTunes etc). HOW ABOUT HOOD???? Hood is an absolute monster. When I was accumulating I had a sneaking suspicion that it might overtake Palantir in my portfolio. Need to check, it may have in terms of position value. I’m getting the same vibe from APP. I’ve made a few bucks trading options on it but never held any shares. Chart indicates it has plenty of upside but it’s hard for me to get excited about something I don’t share the vision in. |
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Originally Posted By grendelbane: So, word on the street is that MSTR may qualify for S&P 500 inclusion today. Up pre-market a little. Preferreds are also up and pay dividends today, (minus STRD). Who’s saying that? Quick glance shows negative TTM EPS which means they shouldn’t be eligible. |
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Originally Posted By Procat: Who’s saying that? Quick glance shows negative TTM EPS which means they shouldn’t be eligible. The YouTube MSTR guy, and many posts on X, and Grok. I know, not always credible, but apparently recently adopted FASB changes make MSTR eligible. Which is not the same thing as making it, but would definitely be a bullish development. MSTR is up 3.78% right now, which is not huge, but is not small either. |
 Robinhood Expected To Join The S&P500 TOMORROW! Summary: One company in the S&P is buying another which creates an opening as the acquired company is removed from the index. In much the same way as Coinbase was added in between rebalancings we may be seeing an addition in the near future. |
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This is an interesting exercise for sure with HOOD. Here is some premise and looking for more information. They didn't make it in, we know they "will" but it's just a matter of what Quarter in the coming year or other. My goal is to do 20% annual growth on every investment. So 1 year from now, will HOOD have gained 20% from it's current position? Will it fall much farther? Will it stabilize? Thoughts and opinions? What would you do? I'm looking to make a larger purchase (between 250 shares-500 shares and open to 1,000 shares) and open discussing, buy next week, wait until we fall back to $70 or other? Time horizon is 3-5 years but looking to scoop on a hard dip and do 20% year over year. Attached File |
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I suspect that a dip to around $80 is possible for HOOD in the next few months, especially since August and September are traditionally weaker months in the market. Possibly lower if we get something like Yen carry trade or Deepseek that takes everything down. That said I grabbed another 100 shares at $98 yesterday as a FOMO play before DDOG got included in the S&P. I also sold 5 cash secured puts this morning for $80 on 7/18/25. |
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HOOD is certainly soft this morning. Lots of criticism of their plans for tokenizing stocks in Europe on Seeking Alpha. Part of it is misplaced IMO. Reminds me of some of the old arguments against Bitcoin. I believe HOOD will eventually resume its upward trend, and also eventually join the S&P 500. |
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Sam Altman is apparently upset that $HOOD tokenized shares of OpenAI and made them available to the masses (where allowed), I suspect any criticism originates with his camp since the move is generally well received. I hope $HOOD can succeed in breaking down the barriers to private markets in the USA. The idea that someone has to be an accredited investor to get into private companies really is laughable in 2025. So what financials aren’t available, 99% of people don’t read them anyway. The idea that you need to protect people from risky investments when they can freely buy things like Hawk Tuah coin is absurd. |
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With $HOOD being up 200% in 3 months it’s very likely some of the institutional holders may trim some because it’s become too large of a position for them. I know in Tom Lee’s ETF $GRNY it has become their largest holding. That said I doubt any will exit their positions entirely. |
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HOOD 52 week high, $100.88. Currently floating down another tick to $91.39. Too optimistic for us to see it on sale at $80-$82? Stabilize shortly? When do I pull the trigger? Looking for 840 shares. Much more exciting at the $82 range and not flattened out at $90. Anyone have any charting software to see downward pressure of options, calls etc at various breakpoints? |
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Going by the deltas on $HOOD put options it’s looks like the probability of <$80 on August 18th is around 25% ETA If I were looking to add 800 shares or so in the next month I would probably sell (4) of the 8/15 $80 puts (currently $3.75) and (4) of the 8/15 $85 puts (currently $5.60). It would generate a 5.6% return ($3740.00 in premium / $66k collateral) in the next 5 or 6 weeks. The risk of course is that the stock runs more and in hindsight you wish you would have just bought in the low 90s. |
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GenXer here so FOMO hits me. I don’t know we’ll see low $80’s. I have more heartburn of lost growth opportunity then paper losses in downswing. Those are easy to stomach but missing out on growth (like the recent bottom) makes me want to puke. Rethinking this play as I need about 840 shares. Edit: 7/10/205 Executed 440 shares. Gunning for 20% YoY with a 3 year horizon. Will we hit $164.19 3 years from now? I am betting we do. 1.2 1.2 1.2 7/10/2025 7/10/2026 7/11/2027 7/12/2028 $95.02 $114.02 $136.83 $164.19 |