How the Tables Have Turned for Two Dow Stocks

2012 ended with the Dow Jones Industrial Average (DJINDICES: ^DJI) up 7.26%. The Index's biggest winner during the year was Bank of America (NYSE: BAC  ) , which was up by more than 100% in the year while the worst performer was Hewlett-Packard (NYSE: HPQ  ) , which lost more than 44% of its value in the year. But now after just three weeks have gone by in 2013, the Dow is up more than 4% so far while the best and worst performers of the prior year have flipped roles.

The Dow's best-to-worst performer so far in 2013 is Bank of America. Shares of the bank are down more than 4% so far in 2013, while the next worst Dow component of the year is Verizon, whose shares are down 1.7% thus far. The bank announced earnings last week and while they weren't terrible, they didn't blow investors' expectations out of the water, either. The biggest downer for the bank were the charges it took during the last quarter because of its involvement in the financial crisis and mortgage practices. The bank posted earnings of $732 million while its two closets rivals, JPMorgan Chase and Wells Fargo, earned $5.7 billion and $5.1 billion, respectively. 

My Fool colleague John Maxfield believes the bank has what it takes and can now make a full recovery because these legal issues will no longer be looming in the back of investors' minds. To read his recap on the bank's most recent earnings report, click here.

The worst-to-best performer is obviously Hewlett-Packard. Shares have risen slightly more than 20% in 2013. The next best Dow performer this year is Caterpillar, whose shares have risen nearly 9%. But as impressive as Caterpillar has performed, that's still less than half Hewlett-Packard's 2013 gains.

This past week alone, shares of the personal computer and printer manufacturer rose 5.9% and led all Dow components. The move higher came after reports indicated that Hewlett-Packard would have buyers for the company's Autonomy and EDS units if it were interested in divesting these assets. An HP representative denied the rumors that the company was looking to sell off these divisions, but many investors still believe breaking up HP would be the best thing for shareholders. Fool analyst Travis Hoium recently noted that while shares have risen more than 50% from their 52-week lows, he still feels the company is not worth the risk at this time. 

More foolish insight

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.


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  • Report this Comment On January 21, 2013, at 6:05 PM, kthor wrote:

    bac will be back this year, not the 100% return, i expect it to be around the 13-16 range end of year ...short term hoping bac down to 10 to buy better option price ...

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