CRH Plc, Carvana Co., and Comfort Systems USA Inc. were added to the S&P 500 index, replacing LKQ Corp., Solstice Advanced Materials Inc., and Mohawk Industries Inc. The trio will join the benchmark at the end of December, boosting shares of Carvana and CRH by over 7% in post-market trading.

Carvana’s stock has surged by 10,000% from a 2022 low of less than $4 to around $400 per share currently. The company sold a record 156,000 vehicles in the most recent quarter, citing cost-cutting efforts and debt restructuring as drivers of earnings growth.

Inclusion in the S&P 500 is crucial for companies due to increased demand from index-tracking funds. To qualify, firms must meet market capitalization, profitability, liquidity, and share-float standards. Expulsion from the index can negatively impact stock prices as index funds adjust their holdings.

Bloomberg Intelligence analysts predicted Carvana, CRH, and Comfort Systems as likely candidates for S&P 500 inclusion. Carvana’s addition brings sector diversification and meets inclusion criteria, with its shares up nearly 100% this year. Stock gains from inclusion announcements are usually short-lived, according to market strategist Matt Maley.

Read more at Yahoo Finance: Carvana, CRH, Comfort Systems to join S&P 500 in rebalancing