Details on the latest quarterly adjustments to the S&P/TSX Composite Index, as well as the S&P/TSX 60 Index were released last night after the bell. In a sign of the times for the cannabis market, yet another former major within the cannabis market has been removed from the index as the sector continues to bleed out.
A total of four names are set to be removed from the Composite Index when it rebalances ahead of the open of trading on September 19. Names to be removed include Aurora Cannabis (TSX: ACB), Aecon Group (TSX: ARE), Dream Office REIT (TSXL D.UN), and New Gold Inc (TSX: NGD). Just three names will be added in their place, reducing the total basket to 237 names from 238. Firms to be added to the index include Algoma Steel Group (TSX: ASTL), Bellus Health (TSX: BLU), and Uni-Select (TSX: UNS).
The removal of Aurora follows a drawn-out tumble for the cannabis producer, whom once aspired to be the “square footage” play in the space in terms of production. With its departure, just Cronos Group (TSX: CRON), Canopy Growth (TSX: WEED), and Tilray (TSX: TLRY) remain within the composite within the category. Notably, Canopy Growth was removed from the S&P/TSX 60 Index earlier this year.
Aurora is believed to have been pushed out of the Index as a result of its tumbling market capitalization, similar to that of Aecon Group and Dream Office REIT. As a rule, names in the index must represent at least 0.04% of the weight of the index. In the case of New Gold, whom has also seen its market capitalization fall as of late, the firm also has failed to meet the minimum pricing requirements of having an average price of $1.00 over the last three months, as well as over the last ten days prior to the reference date.
In terms of the S&P/TSX 60 Index, which measures the 60 largest securities within the composite, Tourmaline Oil (TSX: TOU) has entered the index, a likely result of the increasing focus on the oil and gas sector among investors. The firm takes the place of Bausch Health (TSX: BHC), formerly known as Valeant, whom has seen a massive fall from grace after losing certain patent claims in the third quarter.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.