Every year around this time I look to see if any MFI stocks will be eligible to join the Russell 3000 as that often boosts their share price. I was fortunate to own UTA, which announced they were joining the Russell 3000 the other day (Universal Travel Group to be Added to Russell Indexes). Since that announcement they are up about 10%.
Well AHCI announced yesterday they are being added to the club as well (Allied Healthcare International Inc. to Join Russell 3000 Index). I was stunned. Last year it took about a 260m market cap to make it. With the overall market drop, I thought maybe 180 to 200m would make it this year... but AHCI is at 91m! I might have to buy a few shares this morning... we'll see... probably not. But I'll be interested to see if their stock moves today.
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Barron's did a couple of articles in the past two months on how the R indices are prone to gaming. I guess that there are some stocks whose prices change dramatically on way way higher volumes on the last day in May or something. Apparently, the Russell index decides which companies make the index based on the closing price on one single day, not the average closing prices. Every year there are some stocks whose prices soar on that day and then barely break into the index. Barron's predicted the market cap would be around $80-90 million this year, so I'm not surprised there.
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