Image source: Getty Images
In a few days’ time, a FTSE Russell committee will hold a quarterly review to establish promotions and demotions between the FTSE 100 and FTSE 250.
On the agenda will be some of the UK’s brightest companies that have been growing so quickly over the last three months that they are on the verge of Footsie promotion. Investors will want to pay close attention, because many of the best stocks to buy in recent years have made the jump up to London’s leading index.
What high-flyers might make the grade this time? And are they worth a buy before they reach FTSE 100 status? Let’s take a look.
Top 10
Here’s a table of the 10 stocks closest to the FTSE 100 as of late August. The market capitalisation is the metric used to determine whether a stock is promoted or demoted. Companies are guaranteed entry if the market value makes it into the top 90 (and have a chance if they are just outside too). And because-market cap shifts on a daily basis, any of these 10 might be moving up to the big leagues.
| Position | Market-cap | |
| easyJet | 84 | £5.11bn |
| Ithaca Energy | 94 | £4.42bn |
| Balfour Beatty | 96 | £4.23bn |
| WPP | 100 | £4.11bn |
| Softcat | 101 | £4.02bn |
| Rotork | 102 | £3.96bn |
| Harbour Energy | 105 | £3.93bn |
| Mondi | 107 | £3.82bn |
| Rightmove | 108 | £3.75bn |
| Frasers Group | 109 | £3.73bn |
As things stand, the only guaranteed entrant is easyJet. The budget flyer’s share price has jumped thanks to a mostly-finalised takeover. With its market-cap above the 90th place ‘automatic entry position’, the stock will be on the Footsie if nothing changes. That said, because the airline’s likely going to be private soon, it’s not one I’d think people are interested in buying.
As for the other stocks, there’s a real mix. Companies such as advertising giant WPP or North Sea oil and gas producer Harbour Energy are former members of the FTSE 100. Other firms including engineer Rotork and another oil and gas firm Ithaca Energy are angling to get onto the index for the first time.
As for my own view on this selection, there’s one stock that piques my curiosity as a tempting buy today…
A buy?
Balfour Beatty (LSE: BBY) is a UK-based construction and infrastructure group. Bucking the trend of many other construction stocks of late, the share price is up 274% since 2022. Throw in an unreasonable price-to-earnings ratio of 17 and we have a pretty good first impression.
It’s been a tough old time for the sector due to increasing costs in wages and building materials. So how have Balfour Beatty shares climbed within spitting distance of the FTSE 100? Its international exposure helps, building projects across the pond and in Hong Kong. A focus on high growth areas like energy infrastructure in the UK and data centres in the US is a feather in its cap too.
The firm already has a larger market-cap than a handful of FTSE 100 firms, and is only a few percent away from automatic entry too. A promotion to the big boys’ club would likely provide a further jump as index funds and institutional investors adjust their holdings. I think the stock’s worth considering.
What growth stock do we like better than Balfour Beatty Plc right now?
One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential growth.
And the best bit is that you can see if for yourself, right now, absolutely free of charge!
No jargon. No hard sell. Just a clear look at a growth share idea we think is worth your time.
John Fieldsend owns shares in easyJet.
This story originally appeared on Motley Fool
