Gulfmark Offshore Inc. (GLF - Snapshot Report), the provider of offshore marine support and transportation services, will replace Questcor Pharmaceuticals Inc. in the S&P SmallCap 600 after the close of trading on Monday, Aug 18.
To be included in S&P 600, a company needs to fulfill certain criteria. Its market capitalization needs to be between $400 million to $1.8 billion. As of Aug 15, 2014, the market capitalization of Gulfmark Offshore was $1.06 billion. Subject to review periodically to assure uniformity with market conditions, the market cap of a prospective addition to an index is viewed in the context of its short and medium term historical trends, along with that of the industry.
The company needs to have sufficient liquidity and a reasonable price. The ratio of annual dollar value traded to float adjusted market capitalization should be 1.00 or greater. Moreover, the company should trade at least 250,000 shares in each of the six months leading up to the evaluation date.
For index purposes, a U.S. company ought to have the following characteristics as well. It should file 10-K annual reports and should not be considered a foreign entity by the SEC. The U.S. portion of fixed assets and revenues must comprise a majority of the total, but need not be above 50%. When there is an inconsistency among these factors, assets establish plurality. Revenues determine plurality when there is incomplete asset information. The company should follow a corporate governance structure in line with the U.S. practice.
The stock should be primarily listed in the NYSE (including NYSE Arca and NYSE MKT), the NASDAQ Global Select Market, the NASDAQ Select Market or the NASDAQ Capital Market. ADRs are not qualified for addition. The public float of the stock should be a minimum of 50%. The total of the trailing four quarters’ reported earnings should be positive, as should be the case with the last reported quarter.
Headquartered in Houston, TX, Gulfmark Offshore fulfills all these criteria and was thereby added to the S&P SmallCap 600 GICS Oil & Gas Equipment & Services Sub-Industry index. The company’s vessels carry drilling material, supplies and personnel to offshore facilities, apart from moving and positioning drilling structures. A significant portion of its operations are international. On Jul 21, 2014, its active fleet included 75 owned vessels and 4 managed vessels.
Gulfmark Offshore currently carries a Zacks Rank #4 (Sell). However, stocks in the oil and gas sector like Weatherford International plc (WFT - Analyst Report) and Sunoco Logistics Partners L.P (SXL - Analyst Report), both sporting a Zacks Rank #1 (Strong Buy), are expected to perform better.