Following up on last week’s slew of index changes, another spin off resulted in another index change yesterday. The Ensign Group(ENSG) completed its spin off of CareTrust REIT(CTREV) after yesterday’s close. Subsequent to the spin, CareTrust joined its former parent in the S&P SmallCap 600, pushing out struggling insurer Tower Group International(TWGP).
Given that both stocks are in the same index, we won’t see index based selling pressuring the stock price, but the spinoff’s REIT status may force some sales by style-specific funds.
Disclosure: The author holds no position in any stock mentioned.