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Hasbro (HAS) to Be Added to NASDAQ 100 Index: Time to Buy?
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On Dec 9, NASDAQ announced its annual modifications to the NASDAQ-100 Index wherein Hasbro, Inc. (HAS - Free Report) lists as one of the four new replacements to the existing companies. The re-ranking will become effective from the start of trading session on Dec 19.
The NASDAQ-100 is a capitalization-weighted index composed of the 100 largest non-financial companies listed on the NASDAQ stock market. This news effectively makes the leisure time products manufacturer a lucrative buy at the moment.
Research has shown that getting added to the NASDAQ-100 renders many positives to a company. The market liquidity of the stock is enhanced as analysts’ interests in the company are ignited to a great extent. More thorough research and knowledge about a company increases investor confidence.
Empirically, the bid-ask spread of a stock has been seen to have fallen on its addition to the index. This too is a direct result of increased liquidity.
Meanwhile, Hasbro’s shares have almost consistently outperformed the Zacks categorized Toys/Games/Hobby Products industry year to date. The stock has returned 27.7% over the same time frame when the broader industry grew 8.2%.
Interestingly, Hasbro currently provides a trailing 12-month return on equity of 32.3%, much higher than other companies in the same industry that are also part of this index, namely, Mattel, Inc. (MAT - Free Report) , Electronic Arts, Inc. (EA - Free Report) and Activision Blizzard, Inc. .
Going forward, consistent efforts by the company to establish its global presence through strategic partnerships as well as rapid growth in emerging markets are expected to drive performance. Also, product launches and sales-boosting initiatives bode well.
However, increased competition from alternative modes of entertainment might limit top-line growth while high costs and macroeconomic headwinds could keep profits under pressure.
Nevertheless, the company’s addition to one of the most widely followed indexes raises hope.
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Hasbro (HAS) to Be Added to NASDAQ 100 Index: Time to Buy?
On Dec 9, NASDAQ announced its annual modifications to the NASDAQ-100 Index wherein Hasbro, Inc. (HAS - Free Report) lists as one of the four new replacements to the existing companies. The re-ranking will become effective from the start of trading session on Dec 19.
The NASDAQ-100 is a capitalization-weighted index composed of the 100 largest non-financial companies listed on the NASDAQ stock market. This news effectively makes the leisure time products manufacturer a lucrative buy at the moment.
Research has shown that getting added to the NASDAQ-100 renders many positives to a company. The market liquidity of the stock is enhanced as analysts’ interests in the company are ignited to a great extent. More thorough research and knowledge about a company increases investor confidence.
Empirically, the bid-ask spread of a stock has been seen to have fallen on its addition to the index. This too is a direct result of increased liquidity.
Meanwhile, Hasbro’s shares have almost consistently outperformed the Zacks categorized Toys/Games/Hobby Products industry year to date. The stock has returned 27.7% over the same time frame when the broader industry grew 8.2%.
Interestingly, Hasbro currently provides a trailing 12-month return on equity of 32.3%, much higher than other companies in the same industry that are also part of this index, namely, Mattel, Inc. (MAT - Free Report) , Electronic Arts, Inc. (EA - Free Report) and Activision Blizzard, Inc. .
Going forward, consistent efforts by the company to establish its global presence through strategic partnerships as well as rapid growth in emerging markets are expected to drive performance. Also, product launches and sales-boosting initiatives bode well.
However, increased competition from alternative modes of entertainment might limit top-line growth while high costs and macroeconomic headwinds could keep profits under pressure.
Nevertheless, the company’s addition to one of the most widely followed indexes raises hope.
Hasbro currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>