'Cheapest' DJIA Stocks Outperforming The Market (DIA, AA, BAC, JPM, CAT, CSCO, HPQ)

This week we featured a list of the six cheapest DJIA components as of Monday’s close.  The basis was how discounted the share prices have been to the consensus analyst price target from Thomson’s Reuters’ group of analysts.  This is not always an indication of which stocks you should buy and sell, but the performance has been much better compared to the DJIA itself.  The average was a gain of 2.4%, or 2.1% if you back out the best gain, against only about 0.5% for the DJIA so far.

We gave an in-depth review of analyst targets and added color on the six cheapest DJIA stocks already, but here is how each has panned out since the close of trading on Monday:

  • Alcoa Inc. (NYSE: AA) was at $8.50 on the close of trading on Monday against a consensus analyst target price of $10.68 at the time.  Now shares are trading higher at $8.78, for a gain of 3.3%.
  • Bank of America Corporation (NYSE: BAC) traded at $7.64 as of the close of Monday and shares are up at $7.73 so far on Wednesday, for a gain of only 1.1%.
  • J.P. Morgan Chase & Co. (NYSE: JPM) closed at $36.30 Monday and shares are up at $37.30 so far on Wednesday.  That represents a gain of 2.75%.
  • Caterpillar Inc. (NYSE: CAT) closed at $86.35 on Monday and the price of $86.95 leaves a gain of only about 0.7%.
  • Cisco Systems Inc. (NASDAQ: CSCO) closed at $16.69 on Monday and the current price of $17.12 generates an implied gain of 2.5%.
  • Hewlett-Packard Co. (NYSE: HPQ) closed at $18.69 on Monday and shares are now trading up $19.47 on its higher guidance.  This was an abnormal gain, but it is up almost 4.2%.

This puts the average gain at 2.4%, or if you back out HP’s 4.2% gain it generates an average of almost 2.1%. If you line this up against the SPDR Dow Jones Industrial Average (NYSEMKT: DIA) at $131.65 versus Monday’s close of $130.90, the DJIA SPDR has gained only 0.57%.  The official DJIA level of 13,183.73 at 12:39 PM today versus its index closing price of 13,117.51 would generate a gain of 0.5%.


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