For publicly traded companies, inclusion on the annual Russell 3000 index of stocks is no minor concern.
Mutual funds that track the 3000 or a related Russell index must buy the stock of every company added to the list and dump the issues of those kicked off. With about $250-billion invested in Russell mutual funds such as Fidelity's Small Cap America Fund, the impact on a company's stock price can be significant. Some individual investors inevitably jump on the bandwagon.
But the Tampa Bay area may lose more entries this year than it gains when the Frank Russell Co. of Tacoma, Wash., reshuffles its index, according to preliminary data.
Maritrans, a marine transportation company in Tampa, and American Land Lease, a real estate investment trust in Clearwater, are expected to be added to the list of the 3,000 largest U.S. corporations.
Four local companies are expected to be removed: Paradyne Networks, a Largo maker of Internet access equipment; burger chain Checkers Drive-In Restaurants; staffing company Kforce Inc., and clothingmaker Tropical Sportswear International, all of Tampa.
Some companies move off and on. Checkers first joined the Russell 3000 in 1992, was removed in 1996 and rejoined it last year.
There is some correlation with financial performance. Maritrans and American Land Lease were profitable in 2002, but only one of the four local companies getting booted from the 3000, Tropical Sportswear, finished the year in the black.
Whether, and when, the six local companies will see a spike in stock trades is unclear.
Though the final list of Russell 3000 companies won't be published until July 9, it's based on companies' market capitalization as of May 31. Some mutual fund companies familiar with Russell's methodology are likely to have approximated the list weeks ago, and traded ahead of their peers.
Off and On
The Russell 3000 is an annual list of the nation's 3,000 largest companies, based on market capitalization - stock price multiplied by outstanding shares - as of May 31. Preliminary data suggest several Tampa Bay area companies will be added to or subtracted from the list on July 9.
