Coty joins S&P 500 and investors like it

28-Sep-2016 - Last updated on 29-Sep-2016 at 16:23 GMT

Coty has been added to the Standard & Poor’s 500, an announcement that drew applause from the investment world and sent stock prices on the up.

The cosmetics and personal care players has evolved enormously on the back of an increasing global footprint that is largely thanks to the $12 billion acquisition of a large portion of Procter & Gamble’s higher-end cosmetic and fragrance brands.

The company will officially join the S&P 500 at the close of business on the New York Stock Exchange, this Friday, when it will edge out Diamond Offshore Drilling from the list.

Coty nudges its way into the index

Coty nudges into the bottom of the S&P 500 Index, but with its market share continuing to grow on the back of the P&G acquisition, company executives are looking to strengthen that position.

It will be given S&P GICS (Global Industry Classification Standard) and will be an active part of the Personal Products sub-industry index, S&P Dow Jones confirmed in a press statement.

The announcement led to a spike in share prices increasing on heavy trading volumes when the news reached the New York Stock Exchange floor on Wednesday afternoon.

The S&P 500 is a stock market index for the largest companies traded publically in the United States and is a closely watched reference point for many investors worldwide.

It denotes the top 500 companies with regards to market capitalization, with the weightings and components being determined by the S&P Dow Jones Indices.

Ulta added, Avon falls off S&P 500

In April of this year, Ulta was added to the S&P index after its continued market expansion in the US helped improved its market capitalization, but things have not been quite so rosy for Avon.

Back in March last year, Cosmetics Design senior correspondent Deanna Utroske reported on Avon’s continued demise, which had resulted in the company being delisted from the S&P 500.

Avon delisting was the first time in 48 years that it had not been included in the index, and resulted in the company’s continued fall in market capitalization.

The direct sales player was moved to the S&P MidCap 400 Index after its market capitalization fell to less than $3.2 billion, considerably below the $10 billion value generally given to companies in the S&P 500.