3 Stocks to Buy That Are NOT in the S&P 500 (but Should Be)


  • Here are three stocks to buy that could get added to the index before too long.
  • Casey’s General Stores (CASY): Its growth and profits are worthy of inclusion.   
  • Apollo Global Management (APO): It would be the third alternative asset manager in the index. 
  • Palantir Technologies (PLTR): Profits are coming online making it an excellent choice. 
Stocks to Buy - 3 Stocks to Buy That Are NOT in the S&P 500 (but Should Be)

Source: Shutterstock

S&P Dow Jones Indices announced on June 7 that three companies would be added to the S&P 500. These instantly became stocks to buy for institutional managers who must reconfigure their holdings to track the index’s newest constituents. 

Entering the index on June 24 are KKR (NYSE:KKR), Crowdstrike (NASDAQ:CRWD) and GoDaddy (NYSE:GDDY). Leaving are Robert Half (NYSE:RHI), Comerica (NYSE:CMA) and Illumina (NASDAQ:ILMN). 

The three going into the index are more representative of large-cap stocks. There are a number of qualifications: Market capitalization, profitability, liquidity, American by definition. Stocks already in the S&P MidCap 400 have a good chance if they’ve grown into a large cap. 

Right now, the median market cap of the S&P 500 is $33.43 billion. Market caps range from a low of $4.69 billion to a high of $2.89 trillion. 

Here are three stocks to buy that ought to be in the index — but aren’t.  

Casey’s General Stores (CASY)

Image of Casey's General Store logo on side of a store
Source: Ken Wolter / Shutterstock.com

Casey’s General Stores (NASDAQ:CASY) went public in October 1983. Its shares have appreciated 38,650% in 41 years. Its market cap is just shy of $14 billion. There are 48 companies in the index with a lower market cap. 

The Iowa-based company operates over 2,600 convenience stores in 17 Midwestern states. Founded in 1968, its business is really humming early in 2024.

Casey’s reported Q4 2024 results on June 11th that were significantly better than analyst expectations on strong food and beverage sales. On the bottom line, it earned $2.34 a share, 57% higher than Q4 2023, and 38% higher than the $1.70 consensus estimate. On the top line, its revenue was $3.60 billion, $130 million higher than Wall Street’s estimate and 8.1% higher than a year earlier. 

Following earnings, its shares hit an all-time high of $389.44. They’ve since fallen off a little. 

If you’re a dividend investor, it increased the quarterly payout by 16% to 50 cents. The annual rate of $2.00 yields 0.53%. It’s the 25th annual increase, which should make it a Dividend Aristocrat. It’s important to remember that, among stocks to buy, it’s the growth that counts, not the yield. 

As far as I know, there isn’t a convenience store operator in the index.         

Apollo Global Management (APO)

Apollo Global Management logo on website. APO stock.
Source: Casimiro PT / Shutterstock

Apollo Global Management (NYSE:APO) was founded in 1990 and went public in 2011. Its shares appreciated by 552% in the 13 years since. Its market cap is over $70 billion. There are 129 companies in the index with a higher market cap. 

Currently, only one alternative asset manager is in the index. That would be Blackstone (NYSE:BX) with a $149 billion market cap. KKR’s got a $98 billion market cap and a more storied history than Apollo. As a result, it may be a while before APO is included in the index. 

However, analysts generally like it. Of the 17 that cover it, 11 rate it a “buy,” with a $126 target price, 7% higher than where it’s currently trading.    

Earlier in June, Apollo struck a deal to buy into Intel’s (NASDAQ:INTC) Fab 34 facility in Ireland. It will pay $11 billion for 49% of the joint venture. Intel will retain 51% control. Intel’s already spent $18.4 billion on the facility. 

Apollo finished its latest quarter with $65 billion in dry powder, the industry term for funds left to be invested.  

Palantir Technologies (PLTR)

Palantir Technologies (PLTR) headquarters
Source: Sundry Photography / Shutterstock.com

Palantir Technologies (NYSE:PLTR) was founded in 2003 by CEO Alex Karp and venture capitalist Peter Thiel. It went public in September 2020 using a direct listing. Its shares have appreciated 158% in the four years since. Its market cap is over $57 billion. There are 157 companies in the index with a higher market cap. 

Most of Palantir’s gains have come since the beginning of 2023 when its share price bottomed around $6.25. The gains are primarily because of its Artificial Intelligence Platform (AIP), which it launched in April 2023. In its press release from April 7th, 2023, CEO Alex Karp stated:

“AIP will allow customers to leverage the power of our existing machine learning technologies alongside the increasingly sophisticated natural language processing capabilities of the newest large language models, directly in our existing platforms, including Foundry and Gotham, which are now home to some of the most valuable privately held and industry specific data repositories in the world.”

Fast forward to June 2024 — its AI business is on fire.

On June 17, Argus Research analyst Joseph Bonner initiated coverage of PLTR stock, giving it a “buy” rating with a $29 target price, well above where it’s currently trading. Bonner expects Palantir’s earnings to grow 19% annually over the next five years.

That makes it more than eligible for the index.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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