Investing

The 5 Most Revered DJIA Stocks Since the V-Bottom

It seems hard to imagine that the markets were in a panic selling mode just under one month ago. The peak selling took place in most Dow Jones Industrial Average (DJIA) stocks on October 15 and October 16. Since then, the markets have recovered handily. The DJIA has hit new all-time highs and the index is up 11.1% to 17,614.90 from the bottom of 15,855.12 on October 15. This has effectively been a major bull market off of what market technicians call a V-bottom, within a long-term bull market that is now five and a half years old.

24/7 Wall St. wanted to capture the DJIA stocks that have been the best performing of this past month and since the V-bottom. The lowest gain of the five has been nearly 14%, and the highest gain was more than 22%. It goes without saying that these are not normal gains for just under a month.

We have evaluated the price performance over the past month to smooth out the performance, but of course we have ranked these in ascending order by gains since the formal V-bottom as well. We have added in what the analysts expect from the stock ahead and outlined the dividend yield and added color on each stock. We even included a year-to-date gain.

So, what drove this snapback recovery from the V-bottom? The Bank of Japan has embarked on additional quantitative easing, there are hopes that the European Central Bank will get in on quantitative easing and the Republicans had nothing short of a stellar takeover of Congress. Earnings season ended up better than expected, and the rising U.S. dollar did not crush companies as some had feared. Hopes that the bull market can keep running are now higher than they have been in months.

It turns out that Caterpillar, Microsoft, UnitedHealth, 3M and Visa have represented the DJIA recovery the best. Also, investors showed over and over that they would buy stocks when they went on sale or when the news justified owning them again.

Caterpillar Inc. (NYSE: CAT) is the fifth best-performing DJIA stock since the V-bottom. Shares are up 12.7% over the past month, but the industrial equipment giant’s stock has risen over 13.8% to $102.53 since the low of $90.05 on October 15. Caterpillar shares are up almost 16% year-to-date.

Analysts have a consensus price target of $107.30 for Caterpillar, and its dividend yield is 2.8%. Caterpillar’s highest analyst price target is all the way up at $122. Most recently, Caterpillar showed higher earnings and guidance — after job cuts.

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