The Dow's Top Stocks This Week

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) closed at another record high of 16,221.14 on Friday after jumping 2.96% this week. The beginning of the "taper" and higher-than-expected GDP growth in the third quarter had investors in a buying mood before the holidays. As we head into a short trading week, here are the best performers on the Dow this week.

Conglomerate 3M (NYSE: MMM  ) isn't often a big mover on the market, but this week the stock jumped 8.1%. Management approved a 35% dividend increase to $0.855 per share, increased its expected share buybacks to $17 billion to $22 billion, and said organic growth will be 4%-6% through 2017. These are extremely bullish signs for 3M and Inge Thulin's strategy of focusing on R&D appears to be paying off in the form of higher growth. That confidence made 3M the top Dow stock this week.

American Express (NYSE: AXP  ) rose 4.6% after reaching a settlement with merchants over two antitrust lawsuits. The big result for American Express will be the end of a ban on merchants' charging of an extra fee to use the company's credit cards. This may steer some customers away from using their American Express card, but for shareholders it's more important to have this cloud off the company. Long-term, card use is rising and that's good news for American Express and its stock.  

Cisco (NASDAQ: CSCO  ) rounds out the top three Dow stocks this week with a 4.4% gain. The stock was hammered earlier this month when CEO John Chambers said its five-year revenue growth target was 3% to 6%, down from 5% to 7% previously. Lowering guidance isn't great for any company, but investors should realize that Cisco has more than $50 billion in cash and short-term investments, so there's some value to be had. I don't consider this a great growth stock going forward, but with that much in cash shares have to be a little attractive for investors.  

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  • Report this Comment On December 23, 2013, at 7:16 AM, BradReeseCom wrote:

    Hi Travis,

    Cisco investors are going to need a lot of help in order to make their Cisco investment pay off.

    How so?

    Well, after spending $1 BILLION to purchase Insieme Networks, Cisco CCIE emeritus star Greg Ferro SLAMS Cisco's SDN platform: Application Centric Infrastructure (ACI):

    "The ACI platform has many moving parts including software and hardware, and will take years to achieve momentum. It took Cisco 90 minutes to explain the entire product and technical strategy to me.

    "Cisco has a checkered history of developing software; consistently failing to develop or maintain products during the last decade. A long line of failed software products from acquisitions or internal development suggests a systemic business problem.

    "Customers remember abandoned strategies like Application Oriented Networking and products like CS-MARS and CiscoWorks. Some will question whether Cisco can do software, as well as its commitment to all of its products."

    http://www.bradreese.com/blog/12-22-2013.htm

    Sincerely,

    Brad Reese

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