Stillwater Mining pops on addition to Index
12/11/2012 5:49 pm EST
When a stock gets added to an index, index fund managers—in this case managers of funds that track the S&P Small Cap 600 index—have to add shares of that company to their holdings to keep their portfolio aligned with the index. That can—and apparently has in this case—provide a substantial boost to a stock. Stillwater has a market capitalization of just $1.4 billion with only 117 million shares outstanding. In comparison a single small cap ETF, the Vanguard Small Cap ETF (VB) has total assets of $4.5 billion.
I have a $15 a share target price on this stock.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , may or may not now own positions in any stock mentioned in this post. The fund did not own shares of Stillwater Mining as of the end of September. For a full list of the stocks in the fund as of the end of September see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/