Ackman-backed Howard Hughes climbs on S&P SmallCap inclusion
HHH•Howard Hughes Holdings shares rose as much as 6.7% after the company was set to join the S&P SmallCap 600 Index on Wednesday, replacing Arcosa. Stephens analyst Melissa Roberts expects passive funds to buy 4.3 million Howard Hughes shares, implying about six days of buying demand.
1. Index inclusion lifts shares
Howard Hughes Holdings shares climbed 6.7% to a high of $74.90 early Monday after Dow Jones Indices said the company would join the S&P SmallCap 600 Index before the market open on Wednesday, Oct. 28, replacing Arcosa.
2. Expected fund purchases
Stephens analyst Melissa Roberts said in a note that she expects passive funds will need to purchase 4.3 million Howard Hughes shares, implying about six days of buying demand. The Woodlands, Texas-based company has about 59.7 million shares outstanding and a market capitalization of roughly $4.4 billion.
3. Shift toward diversified holdings
Howard Hughes, best known for its master-planned communities, shifted its focus last year toward buying controlling stakes in businesses in other sectors. Executive board chair Bill Ackman is seeking to build a diversified holding company modeled after Berkshire Hathaway. Howard Hughes shares were last up 5.1% at $73.75, trimming their year-to-date loss to about 8%.
