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Standard & Poor's Announces Index Changes and Recommendations

Strategic Insights

— 1 min read

As the stock market continues to evolve, Standard & Poor's (S&P) is making significant changes to its index and providing recommendations on various companies. In a move that will impact the S&P 500 Index, Frontier Corp. is being replaced by Global Crossing Ltd. following the acquisition of Frontier by Global Crossing. This change is subject to shareholder and regulatory approval. Meanwhile, S&P has reiterated its 4 STARS (accumulate) recommendation on shares of Herman Miller, citing solid first-quarter earnings and a positive outlook for the company.

Key Takeaways:

  • S&P will replace Frontier Corp. with Global Crossing Ltd. in the S&P 500 Index, following the acquisition of Frontier by Global Crossing.
  • The merger between Earthlink Network and MindSpring Enterprises will create the nation's second-largest provider of Internet access.
  • S&P has reiterated its 4 STARS (accumulate) recommendation on shares of Herman Miller, citing solid first-quarter earnings and a positive outlook for the company.
  • Analyst Jordan Horoschak notes that the Geiger Brickel acquisition helped boost Herman Miller's backlog by 21%.
  • The proposed merger is subject to shareholder and regulatory approval.
  • Global Crossing is a provider of global internet and long distance telecommunications facilities and services utilizing a network of undersea digital fiber optic cable systems and associated terrestrial backhaul capacity.
  • Herman Miller's stock is trading at 13 times its fiscal 2000 earnings per share estimate of $1.77, below its three-year average P/E of 18.

Statistics:

  • 21% increase in Herman Miller's backlog following the Geiger Brickel acquisition.
  • Fiscal first-quarter earnings per share of $0.43 vs. $0.39, solidly ahead of analyst Jordan Horoschak's estimate of $0.41.
  • 13 times trading multiple of Herman Miller's stock, priced below its three-year average P/E of 18.
  • Global Crossing is acquiring Frontier Corp. for an undisclosed amount.

Sources:

  • "S&P Index Changes -- Who's In, Who's Out" http://www.personalwealth.com/prn04
  • "S&P Reiterates Accumulate on Herman Miller Shares" http://www.personalwealth.com/prn04
  • "EarthLink, MindSpring in Merger Pact" http://www.personalwealth.com/prn03

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