When blue chips get too popular – like the five I’m going to show you today – these “safe stocks” can actually be dangerous to continue holding in your portfolio.
The problem with blue-chip stocks? Call it the “Curse of the Dow.” The Curse says a stock that joins the Dow Jones Industrial Average will essentially hit a wall, underperforming in the ensuing months compared to how it performed before ascension. It’s not perfect, but it’s close – since 1999, 15 of 16 stocks that have joined the Dow have averaged 1% gains over the next six months, but averaged 11% gains in the six months before inclusion.
Why? There are a few factors, but one of the most prevailing is that by the point a stock has joined the Dow, it’s typically nearing the end of its growth ramp and reaching the slower-growth “mature” part of the business cycle.
Hot Blue Chip Stocks To Own Right Now: Lowe’s Companies Inc.(LOW)
- [By Douglas A. McIntyre]
Lowe’s Companies Inc. (NYSE: LOW) may be among the largest home improvement retailers in America, often ranked just behind Home Depot Inc. (NYSE: HD). New CEO Marvin Ellison, who helped wreck J.C. Penney Co. Inc. (NYSE: JCP), faces an uphill battle Lowe’s cannot win.
- [By Demitrios Kalogeropoulos]
Operating margin just hit a record, too, at 14.5% of sales, while Home Depot’s 34% return on invested capital makes it among the most efficient businesses on the market. Peer Lowe’s (NYSE:LOW) hasn’t been able to keep pace with any of these key metrics. The industry’s second-place retailer logged 4% comparable-store sales last year, compared to Home Depot’s 6%. Its operating margin is still stuck in single digits, and return on invested capital is 19%.
- [By Logan Wallace]
Prudential Financial Inc. lessened its position in shares of Lowe’s (NYSE:LOW) by 19.6% during the first quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 945,909 shares of the home improvement retailer’s stock after selling 230,358 shares during the period. Prudential Financial Inc. owned approximately 0.11% of Lowe’s worth $83,003,000 as of its most recent filing with the Securities and Exchange Commission.
- [By Steve Symington]
Still, some individual stocks easily outpaced the rest, includingRH (NYSE:RH), Biocept (NASDAQ:BIOC), and Lowe’s (NYSE:LOW). Read on to learn why.
- [By Ethan Ryder]
W.G. Shaheen & Associates DBA Whitney & Co lifted its holdings in shares of Lowe’s (NYSE:LOW) by 2.4% during the 1st quarter, HoldingsChannel reports. The firm owned 62,877 shares of the home improvement retailer’s stock after purchasing an additional 1,477 shares during the quarter. Lowe’s comprises 1.6% of W.G. Shaheen & Associates DBA Whitney & Co’s holdings, making the stock its 22nd largest position. W.G. Shaheen & Associates DBA Whitney & Co’s holdings in Lowe’s were worth $5,517,000 at the end of the most recent quarter.
Hot Blue Chip Stocks To Own Right Now: QuinStreet, Inc.(QNST)
- [By Joseph Griffin]
QuinStreet (NASDAQ:QNST) Director James R. Simons sold 229,718 shares of the company’s stock in a transaction on Thursday, May 17th. The stock was sold at an average price of $12.39, for a total transaction of $2,846,206.02. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website.
- [By Max Byerly]
Schwab Charles Investment Management Inc. boosted its holdings in shares of QuinStreet Inc (NASDAQ:QNST) by 41.6% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 99,823 shares of the technology company’s stock after purchasing an additional 29,306 shares during the period. Schwab Charles Investment Management Inc. owned approximately 0.22% of QuinStreet worth $1,275,000 at the end of the most recent quarter.
- [By Dan Caplinger]
The mood was negative on Wall Street on Wednesday, and most major benchmarks finished in the red. Strength in the technology sector wasn’t enough to lift more cyclically focused benchmarks like the Dow Jones Industrial Average, and the combination of an attack on Saudi Arabia that sent oil prices higher and some disquieting readings on the inflation front kept investors from feeling more confident about stocks going into earnings season. In addition, some individual companies had bad news that sent their shares lower. Analogic (NASDAQ:ALOG), QuinStreet (NASDAQ:QNST), and MSC Industrial Direct (NYSE:MSM) were among the worst performers on the day. Here’s why they did so poorly.
Hot Blue Chip Stocks To Own Right Now: Piedmont Office Realty Trust, Inc.(PDM)
- [By Paul Ausick]
Piedmont Office Realty Trust Inc. (NYSE: PDM) dropped about 3.5% Tuesday to post a new 52-week low of $17.35. Shares closed at $17.98 on Monday and the stock’s 52-week high is $22.74. Volume was about 60% above the daily average of around 1.3 million shares. The company had no specific news.
- [By Logan Wallace]
Get a free copy of the Zacks research report on Piedmont Office Realty Trust (PDM)
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- [By Ethan Ryder]
Sumitomo Mitsui Trust Holdings Inc. reduced its holdings in shares of Piedmont Office Realty Trust (NYSE:PDM) by 2.4% in the first quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 131,748 shares of the real estate investment trust’s stock after selling 3,194 shares during the period. Sumitomo Mitsui Trust Holdings Inc. owned about 0.10% of Piedmont Office Realty Trust worth $2,317,000 at the end of the most recent quarter.
Hot Blue Chip Stocks To Own Right Now: German American Bancorp, Inc.(GABC)
- [By Logan Wallace]
German American Bancorp, Inc. (NASDAQ:GABC) – Research analysts at FIG Partners increased their FY2018 earnings estimates for German American Bancorp in a research report issued to clients and investors on Wednesday, May 2nd. FIG Partners analyst B. Martin now anticipates that the bank will post earnings of $2.02 per share for the year, up from their prior estimate of $2.00.