April's Worst Dow Stocks

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has been on a tear in its recent run-up to record highs, but in April the index couldn't keep up the torrid pace of early 2013. The Dow only picked up 1.8% in the fourth month of the year -- a far cry from the 13%-plus it has gained since the start of January.

A few plunging stocks didn't help the index's fortunes last month. From one company mired in the downfall of the PC market to another crushed by disappointing earnings, here are the Dow's three biggest losers in April.

Earnings hit hard
The Dow plowed through the thick of earnings season in April, and IBM's (NYSE: IBM  ) disappointing quarterly results sent investors scurrying. Shares of Big Blue fell 4.6% for the month, and as the most expensive stock on the price-weighted Dow, IBM played a big role in limiting the Dow's April gains.

Why did IBM do so badly? The company's revenue sank 5% for the quarter, and while earnings managed to climb slightly, the whiff was IBM's first miss in years. The company reacted quickly by expressing interest in selling some of its businesses to improve performance, but investors still bailed on word of the poor earnings. Still, IBM has made smart moves since then, particularly by announcing a $5 billion stock buyback at the end of April and raising its dividend, so all is not lost for IBM shareholders. Indeed, the ambitious plans to return value to shareholders could tempt some investors to pick up this solid stock on a dip.

GE (NYSE: GE  ) is another rock-solid stock that took a blow from earnings. The company's quarterly data actually topped analyst projections, even after discounting GE's multibillion-dollar sale of NBCUniversal to Comcast. However, European weakness caused its industrial division to lose 6% in revenue and 11% in earnings, as well as slamming GE's power-generation and water-treatment division. That was enough to send investors fleeing, and this problem won't go away soon: While CEO Jeff Immelt expects total company earnings to improve this year, Europe's manufacturing industry has been in free fall across the continent lately. Even Germany, long the economic foundation of the continent, has seen its PMI dip into contraction territory. Don't expect GE's fortunes across the Atlantic to turn around in any meaningful way soon.

April's biggest loser, however, was topsy-turvy Hewlett-Packard (NYSE: HPQ  ) . Perhaps it should come as no surprise that this tumultuous stock topped the Dow's loser list last month, with shares falling a whopping 11.6%. After all, HP is still stuck in its turnaround plans, and the PC market has done it no favors. PC sales experienced their sharpest drop of all time in the first quarter, according to measurement and research company IDC, declining 14% year over year. That's bad news for HP, which still relies heavily on PCs for a significant chunk of revenue.

However, there are signs of hope for this stock, even amid the darkness. HP has pivoted away from PCs recently, looking to expand into growing industries. Even in the PC industry, the firm has committed to growing margins in order to offset revenue declines. It may not be enough to warrant a buy on this beleaguered stock, but HP's far from dead -- despite what that 11.6% drop might suggest.

Is HP poised for a turnaround?
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 is 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 detour 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.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2400015, ~/Articles/ArticleHandler.aspx, 9/30/2016 1:32:45 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,321.47 178.02 0.98%
S&P 500 2,169.55 18.42 0.86%
NASD 5,311.71 42.55 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 1:17 PM
^DJI $18321.34 Up +177.89 +0.98%
GE $29.63 Up +0.10 +0.32%
General Electric CAPS Rating: ****
HPQ $15.64 Up +0.25 +1.62%
HP CAPS Rating: ***
IBM $159.72 Up +1.61 +1.02%
IBM CAPS Rating: ****