The Motley Fool

IOOF shares have been dumped out of the ASX 100

The IOOF Holdings Limited (ASX: IFL) share price will be on watch today after the embattled financial services company was dumped out of the ASX 100 index.

According to the S&P Dow Jones Indices quarterly rebalance, IOOF will be removed from the index on March 18 and replaced with investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

This caps a miserable 12 months for IOOF which has seen its share price almost halve in value after its appearance at the Royal Commission.

Whereas Washington H. Soul Pattinson shareholders have another reason to smile after a stunning 12 months which has seen its share price rise a staggering 75%.

ASX 200 changes.

Elsewhere, S&P Dow Jones Indices has made a number of changes to the benchmark ASX 200.

Heading to the exits later this month are the shares of auto retailer Automotive Holdings Group Ltd (ASX: AHG) and renewable energy company Infigen Energy Ltd (ASX: IFN).

I don’t think this will come as a surprise to either company. Last month Automotive Holdings posted a statutory net loss after tax of $225.6 million and scrapped its interim dividend. Infigen performed better but posted a 21% decline in profits to $21.1 million.

Replacing these two companies in the benchmark index will be investment platform provider HUB24 Ltd (ASX: HUB) and financial services company Pinnacle Investment Management Group Ltd (ASX: PNI).

Last month HUB24 posted a 16% increase in half year revenue to $47.1 million and a 46% lift in underlying net profit after tax to $3.1 million. Pinnacle was also a strong performer, growing half year profit by 25% to $10.1 million.

What now?

When shares are added to an index it can lead to an increase in demand for its shares from exchange traded funds that are designed to track an index and from fund managers that may only be permitted to buy shares on certain indices.

Whereas, when shares are removed it can lead to selling pressure for the same reasons.

Of all the shares mentioned today, HUB24 is the one that interests me most and feel could be worth considering with a long term view.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Automotive Holdings Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles...

Latest posts by James Mickleboro (see all)