|
Last year
the Dow Jones Industrial Average gained over 800 points to
finish the year with a moderate, but acceptable gain of 6.4%.
Nineteen of the 30 Dow stocks posted gains with fifteen posting
double-digit gains. In fact, five of the Dow stocks had returns
of over 30% last year. So how are last year’s top performers
doing this year?
Merck
Last
year’s top Dow stock was Merck, which posted an incredible 37.4%
gain. Unfortunately, this year it has been one of the worse
performers, with shares losing over 40%. Negative media coverage
along with the US non-approval of Cordaptive has weighed heavily
on the shares. However, the company’s management is still very
optimistic about the long-term outlook of the company and has
continually hinted that more light will be shed regarding these
future plans at the December Investor Day.
McDonald’s
The
ever-popular fast-food chain posted a spectacular 36.4% gain
last year and is the only one of last year’s top-performers to
show a gain this year. To date, MCD’s shares have been immune to
the global slowdown and are up 4%. Strong worldwide sales along
with a some key menu changes (e.g. Iced coffees, $1 drinks,
Value menu) have allowed the company to continue to beat
analysts estimates the last three quarters.
Intel
After
delivering a brilliant 34.3% return last year, INTC’s shares
have slid over 21% in 2008. Macro environment concerns have
continued to weigh on this stock despite beating analyst top and
bottom line estimates in the previous quarter.
Chevron
The recent
free-fall in oil prices has erased CVX’s earlier market gains
and now shares are down 11% from the beginning of the year.
After finishing last year with an impressive 30.6% gain to
$91.36, CVX’s shares traded above $100 during the early summer
when oil prices were approaching $150/barrel. Now with oil below
$110, the company has lowered expectations for 2008/2009 taking
it’s stock price with it.
Coca
Cola
Finally,
we get to Coca Cola who saw their shares gain just over 30% last
year, but have dropped almost 15% this year due primarily to the
slowing macro environment. The rising U.S. dollar is also
weighing on KO’s shares as almost 80% of their operating income
comes from international markets. In addition, rising fuel costs
and falling consumer discretionary incomes have caused many
investors to exit their positions.
At the time this article was
published, the author did not have a financial position in any
of the stocks mentioned in this article.
Read
Disclosure Policy |
