Investing
Eight Stocks That Will Have Huge Volume Friday Around S&P 500 Rebalance
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This Friday, trading volume on some top stocks in the S&P 500 will soar. In addition to the normal volatility and volume associated with quadruple witching, the S&P 500 will undergo its quarterly share and style rebalancing. What this means for investors is that many of the top names in the S&P 500 will have to be bought and sold to get the percentages required. This also may provide some opportunity for investors who buy in front of the changes.
The analysts at Jefferies have done their math and have pinpointed the stocks that likely to have the largest buying activity. After the rebalance, the two largest sectors in the S&P 500 will be information technology, with 18%, and financials, with 16.3%. Here is a list of the eight stocks that should receive the most buying volume and activity on Friday.
General Motors Co. (NYSE: GM) leads this list with more than $850 million in purchasing. With all the government’s shares of the stock having been sold, many Wall Street firms feel that GM stock has tremendous upside. Hedge fund manager Kyle Bass recently disclosed a very large position in the company. The Thomson/First Call price target for the stock is $48. GM closed Monday at $41.44.
Google Inc. (NASDAQ: GOOG) will see significant buying for the rebalance of almost $240 million. Google is stepping up an effort to win more advertising dollars from brands because the Internet giant sees this area as one of the next big drivers of its revenue growth. The push focuses on its YouTube online video business, but also includes Google’s display ad network and its social network Google Plus. The consensus price target for the Internet giant is $1,110. Google closed Monday at $1,072.98.
Microsoft Corp. (NASDAQ: MSFT) will see sizable purchasing on Friday. With more than 2 million of the new Xbox One gaming consoles already sold, and more expected to be added to that total, the company may be poised to deliver shareholders a strong fourth-quarter earnings number when it reports next month. Investors are paid a solid 2.9% dividend. The consensus price target for the stock is set at $36, and Microsoft closed Monday at $36.88.
Johnson & Johnson (NYSE: JNJ) will be a stock with buying behind it come Friday. The health care giant should see close to $145 million in dollar volume. With everything from medical devices to over-the-counter health items, the stock is a solid add for conservative portfolios. Investors are paid a 2.8% dividend. The consensus price target for the stock is $96. Johnson & Johnson closed Monday at $91.37.
Goldman Sachs Group Inc. (NYSE: GS) can look forward to solid dollar volume. The white glove brokerage firm is expected by many on Wall Street to have an outstanding 2014 as it exploits an expanding investment banking business and a growing high net worth clientele. We have recently highlighted some of the changes on their highly regarded Conviction Buy List. Investors are paid a 1.3% dividend. The consensus price target on the stock is $178. Goldman Sachs closed Monday at $170.95.
Berkshire Hathaway Inc. (NYSE: BRK-B) will get a solid buying lift on Friday. The lower priced shares of Warren Buffett’s gigantic investment vehicle should see more than $90 million in buying come in. Investors looking to have a broad portfolio vehicle that contains public and private equity should consider owning Berkshire Hathaway. The consensus price target for the stock was not posted. Shares closed Monday at $113.96.
Amazon.com Inc. (NASDAQ: AMZN) will have some solid purchasing come in Friday. The Internet giant is expected to have an outstanding holiday season with possibly the highest revenues the company has ever posted. The consensus price target for the stock is set at $404.13. Shares closed Monday at $388.97.
Pioneer Natural Resources Co. (NYSE: PXD) is a top name for Friday. The company is a major oil player in the Permian Basin in West Texas. Some Wall Street firms think it can be targeted by a large integrated looking to expand production here in the United States. The consensus price target for the stock is set at $233.75. Pioneer closed Monday at $179.52.
Just because there is a buying volume increase in these stocks does not necessarily mean they will trade significantly higher. However, many portfolio managers are really just closet indexers and they tend to mimic rebalance moves. Investors that do buy these top names should be rewarded now and in the future as most of them dominate their respective areas.
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