Stock in the highly popular automotive website Cars.com (NYSE: CARS) has been attracting incredible amounts of retail attention in the last few days of trading, soaring towards the end of last week on news that the company will be joining the S&P SmallCap 600 index on December 2nd.
Being part of the index means exposure to the portfolios of various mutual and exchange-traded funds, hence retail traders and other investors are hoping to get in early on a possible bull run, translating to a more than 20% price surge before the weekend.
The company will take the place of DSP Group, which is to be acquired by Synaptics, a current member of the S&P MidCap 400. It isn’t just the index-joining news that has earned the company its attention – investors are still happy will the company’s solid third-quarter results released at the beginning of this month, showing an increase in year-on-year revenue and cash flow.
Momentum is slowing as we move closer to the final date, and it appears market sentiment has already been built into the current price, hence much more of an upside might be limited for the time being. This being said, once part of the SmallCap 600 – more institutional investors and funds will start to flock to the new ticker.
CARS stock is holding a daily gain of 2.3% and an annual gain of 44%. Price is currently trading at $16.48, just under the $16.50 level.
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