Why First Advantage Stock Crushed the Market Today
Written by Eric Volkman for The Motley Fool -> This is the S&P SmallCap 600 index, where it'll be replacing Kennedy-Wilson Holdings. The change is to take effect this coming Tuesday. It was rather advantageous to own First Advantage (NASDAQ: FA) stock as the trading week came
This is the S&P SmallCap 600 index, where it'll be replacing Kennedy-Wilson Holdings.
It was rather advantageous to own First Advantage (NASDAQ: FA) stock as the trading week came to a close. Shares of the next-generation employment verification specialist, which enhances its solutions with artificial intelligence (AI) , rose by almost 6% on Friday after being added to an important stock index.
That rise easily topped the 0.5% gain of another well-known market gauge, the S&P 500 index.
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After market close on Thursday S&P Global , the company behind its near-namesake S&P series of indexes, announced First Advantage would be joining one. Specifically, the company's equity will be included in the S&P SmallCap 600.
As is typical with such moves, First Advantage was tapped because a current index component no longer qualifies for inclusion. The stock is replacing real estate company Kennedy-Wilson Holdings , which is being acquired.
The switch will take effect prior to market open next Tuesday, June 16.
Investors usually get excited about fresh inclusion in a stock index, particularly one managed by index king S&P Global, over a sudden jump in a company's visibility. More than anything, it makes the affected stock an instant target for the many index funds that remain durably popular with investors.
