Despite the sluggishness of broader market indices, which are relatively flat so far this year, a number of individual stocks are swiftly moving onward and upward. Seven of those outperformers from the Dow Jones Industrial Average (DJIA), with year to date gains above 5%, include JPMorgan Chase & Co. (JPM), Visa Inc. (V), Intel Corp. (INTC), Nike Inc. (NKE) Cisco Systems Inc. (CSCO), Microsoft Corp. (MSFT) and Boeing Co. (BA).
As of the close of trading on Wednesday, JPMorgan is up 7% year to date, Visa is up 8%, Intel Corp. is up 12%, Nike is up 6%, Cisco is up 16%, Microsoft is up 8% and Boeing is up 14%. Handily outperforming their broader index’s performance of just over 0% so far this year, as well as the 1.5% return of the S&P 500, these Dow companies are exhibiting strengths that have caught the eyes of investors amid a lackluster market.
JPMorgan, for example, reported a record year for earnings in its latest quarterly earnings report. Like the rest of the banking sector, the bank will enjoy the benefits of both tax and regulatory reform, the increasing likelihood of higher interest rates and technological advances. (To read more, see: Why JPMorgan’s Stock Is Poised for Even Bigger Gains.)
Microsoft is getting a boost from increased enterprise buying of both its cloud computing and on-site software services, and should get additional benefit from a boost in enterprise demand due to lower corporate tax rates. The company is also working on a “Netflix for Video Games."
Visa, recently cited by Goldman Sachs as one stock of 50 stocks that will outperform its sector based on realized and consensus forward earnings as well as sales growth, is expanding into both new and old areas.
Intel, a chipmaker that readily beat its fourth quarter earnings target and raised its dividend by 10%, has been making strong investments in “areas like memory, programmable solutions, communications and autonomous driving,” according to Chief Executive Brian Krzanich. (To read more, see: Chip Stocks At Record Highs Still a Bargain.)
Taking up the Rear
On the other hand, one of the big gainers so far this year, Boeing, tumbled at the end of February and has failed to regain those losses. One fear is that Trump’s protectionist stance and new steel and aluminum tariffs could raise the airplane manufacturer’s productions costs.
As for the Dow stragglers, General Electric Co. (GE) is down 20% on the year, Exxon Mobil Corp. (XOM) is down 10%, Procter & Gamble Co. (PG) is down 16%, and Verizon Communications Inc. (VZ) and Wal-Mart Inc. (WMT) are both down 11%. Evidently, when the market is moving sideways, it’s worth looking inside the broad indices to find the real winners.