Four companies-F5 Networks, Inc. (Nasdaq:FFIV), Netflix, Inc. (Nasdaq:NFLX), Newfield Exploration Co. (NYSE:NFX)
and Cablevision Systems Corporation (NYSE:CVC)
-were last night announced as the newest components of the S&P 500 index, graduating from the S&P MidCap 400.
Netflix and F5 Networks have been two of the highest-flying American tech stocks this year, up 255% and 165% YTD, respectively. Both have long since eclipsed the $5 billion large cap requirement for new S&P 500 membership, with market caps of $11.31b for FFIV and $10.20b for NFLX. Each carries a P/E ratio near 75, making them highly valued by traditional metrics. Netflix took a hit ealier this week, trading down as much as 8% after CFO Barry McCarthy announced he was moving on to explore other career opportunities. The stock has rebounded, however, opening this morning near highs for the week and frustrating the legion of naysayers for the Che Guevara of media. FFIV shares were also boosted by the announcement, opening up more than 3% this morning before pulling in.
Cablevision (cable) and Newfield Exploration (oil and gas) operate in more traditional arenas and, in this company at least, have gained only a "paltry" 35% and 49 on the year, respectively. Each carries a market cap of around $10b. CVC opened up more than 5% higher and NFX for a 2.5% boost this morning following last night's announcement.
To make room for the new additions, three smaller companies (with market caps below $1.5b)-The New York Times Company (NYSE: NYT), Eastman Kodak Company (NYSE:EK)
, and Office Depot, Inc. (NYSE:ODP)
-were shifted to the S&P MidCap 400. NYT and ODP have greatly underperformed, with both down more than 20% on the year. The New York Times has struggled to maintain growth in a fast-evolving media landscape, and Office Depot has been disproportionately affected by the real-estate collapse and economic slowdown. The final spot in the S&P 500 was created by the Pfizer Inc. (NYSE:PFE)
acquisition of King Pharmaceuticals, Inc. (NYSE:)
. NYT, EK and ODP are down 2.67%, 1.98%, and 3.23% on the day after the demotion.*DISCLOSURE:
No relevant position
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