Why Hawaiian Electric Industries Stock Was Soaring Today
Key Points
The company's shares are being added to a high-profile index.
This is part of a quarterly readjustment by the well-known company that manages the stock market gauge.
- 10 stocks we like better than Hawaiian Electric Industries ›
Hawaiian Electric Industries (NYSE: HE) was providing plenty of financial juice to its shareholders on Monday. Following news that the utility stock is set to be included in a key equity index, market players rushed to buy it, driving the price up by 11% in mid-afternoon trading.
Graduation day
Just after market close last Friday, S&P Global Indices -- the company behind such closely followed stock market gauges as the S&P 500 index -- announced adjustments to several of its indexes. As part of its latest quarterly rebalancing effort, Hawaiian Electric will become a component stock of the S&P SmallCap 600 Index.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
All told, 14 stocks (including Hawaiian Electric) were added to the index, while 13 were deleted. Among the other titles that are to join the lineup are travel stock Marriott Vacations Worldwide and healthcare company Perrigo.
All of S&P Global's adjustments this cycle (which include several changes to the S&P 500 index) will take effect prior to the start of trading on Monday, Dec. 22.
Index effect incoming
This is only the latest example of the vaunted "index effect" that can impact stocks after such announcements are made. Hawaiian Electric's shares will surely benefit from ascension to the S&P SmallCap 600, as it will be up for consideration by the many index funds that trawl these lineups. However, inclusion on an index changes very little, if anything, about a company's fundamentals.
Given that, investors shouldn't buy or sell Hawaiian Electric on the basis of its joining its new club.
Should you invest $1,000 in Hawaiian Electric Industries right now?
Before you buy stock in Hawaiian Electric Industries, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Hawaiian Electric Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $540,587!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,118,210!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 8, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
