The Nuix Ltd (ASX:NXL) share price is surging higher on Monday after being named as a new addition to the illustrious ASX 200 index…
The post Why the Nuix (ASX:NXL) share price is surging higher today appeared first on The Motley Fool Australia. –
The Nuix Ltd (ASX: NXL) share price has started the week in sensational form.
In afternoon trade, the investigative analytics and intelligence software provider’s shares are up 7% to $5.89.
However, despite this strong gain, the Nuix share price is still down 50% from its 52-week high.
Why is the Nuix share price surging higher today?
According to S&P Dow Jones Indices, Nuix will join the illustrious index on 22 March along with Codan Limited (ASX: CDA), Champion Iron Ltd (ASX: CIA), Hub24 Ltd (ASX: HUB), Nickel Mines Ltd (ASX: NIC), and Pilbara Minerals Ltd (ASX: PLS).
They will be replacing the outgoing Bravura Solutions Ltd (ASX: BVS), GWA Group Ltd (ASX: GWA), Sandfire Resources Ltd (ASX: SFR), Smartgroup Corporation Ltd (ASX: SIQ), Service Stream Limited (ASX: SSM), and Tassal Group Limited (ASX: TGR).
Why is this a good thing for Nuix shares?
Being included in the ASX 200 is often good news for a company’s shares as it can lead to increased buying from investors in the near term following the announcement.
This is because certain index funds that track the ASX 200 index will need to buy shares to mirror the changes. Conversely, the shares being kicked out of the index will often underperform due to increased selling.
In addition to index funds, there are many fund managers out there that have strict investment mandates. One common mandate is that they only invest in companies that are listed on the benchmark index.
This means that any fund managers that were wanting, but unable, to invest in Nuix shares, suddenly have the opportunity to do so.
And with analysts at Morgan Stanley recently giving its shares an overweight rating with a lofty $10.75 price target, there might be a few fund managers doing exactly that.
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 February 15th 2021
- Why Nuix, Hub24 shares are on watch
- 2 top ASX growth shares to buy next week
- ASX tech correction? 10 of the worst-hit shares
- Why AVZ, Legend Mining, Nuix, & Vocus shares are surging higher
- 2 ASX shares at 52-week lows: Are they bargain buys?
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd and Hub24 Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd, Hub24 Ltd, Nuix Pty Ltd, Service Stream Limited, and SMARTGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.