Controversial US prison operator CoreCivic will be booted out of the S&P MidCap 400 next week, in what some responsible investors are describing as proof of the industry’s unsustainability.
In a statement, S&P Dow Jones Indices said that on August 17, Builders FirstSource, which makes construction materials, "will replace CoreCivic Inc. in the S&P MidCap 400, and CoreCivic will replace Valaris plc in the S&P SmallCap 600".
"CoreCivic is more representative of the small-cap market space," it said.
CoreCivic’s shareprice has tumbled more than 40% since the beginning of March, but saw some uplift on the back of the announcement this week. Some analysts put the sudden growth down to investors predicting that trackers of the S&P SmallCap 600 will become ‘forced buyers’ when it enters the index next week.
However NorthStar Asset Management’s CEO, Julie Goodridge, said the relegation was a sign that responsible investment concerns were driving…