The Dow Inches Higher As Travelers Hits New All-Time High; J&J, Pfizer Also Gain

Modest gains in the Dow Jones Industrials started a winning streak for the average.

May 22, 2014 at 9:05PM
Longview

On Thursday, the Dow Jones Industrials (DJINDICES:^DJI) gained 10 points, lagging behind the percentage gains in the broader market but still adding to its triple-digit advance from Wednesday. Investors seemed content to ride the ongoing wave of optimism higher, especially as it now appears that the Federal Reserve will avoid premature moves to tighten monetary policy. Among the Dow's 30 component stocks, Travelers (NYSE:TRV) hit a new all-time high, while Johnson & Johnson (NYSE:JNJ) fell just short on a technicality, and fellow pharma stock Pfizer (NYSE:PFE) also picked up ground.

Travelers gained only about 0.2%, but that was enough for the stock to hit a new all-time closing high. For more than a year now, Travelers has enjoyed the fruits of good fortune, as a long string of powerful and damaging storms in past years gave way to a period of relative calm. As a result, Travelers' loss experience has been extremely favorable lately, allowing the company to enjoy massive profits. Yet even though Travelers' current earnings multiple of 9 makes it seem like a dirt-cheap stock by some measures, Travelers investors need to keep in mind that even a return to normal loss conditions in the property and casualty insurance market will cause earnings to drop from their current levels. Nevertheless, with prospects for stability in the bond market also supporting Travelers' financials, the stock has room to climb higher until the next big storm hits.

Jnj

Johnson & Johnson rose half a percent today, and were it not for the stock having gone ex-dividend, today's close would have been an all-time record high for J&J as well. This morning, Johnson & Johnson announced its plans to bolster its medical-device and diagnostics business, an area that has been overshadowed by the strong growth on the pharmaceutical side of J&J's business. Yet the Dow component is the worldwide leader in medical devices and diagnostics, and Johnson & Johnson recognizes the need to keep investing in research and development in order to sustain its pipeline of more than 30 products for which filings are expected over the next two and a half years. In particular, J&J has targeted emerging markets as a source of strong growth, and even though it already gets more than 20% of its revenue from emerging markets, boosting that total could help move the needle for the entire company.

Pfe

Pfizer gained 0.3% as news continues to swirl about its failed takeover attempt of British drugmaker AstraZeneca. The latest news involves a major institutional investor in the British drug giant that supported the rejection of Pfizer's bid but believes that future talks could be productive. It's unclear how long Pfizer would wait for a possible deal, though, and given the massive size of the proposed buyout, Pfizer likely won't keep the window on a merger open indefinitely. If the bid eventually does fail, it'll mark a missed opportunity for Pfizer, but the pharma company has plenty of room for other growth moves down the road.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click here to discover more about this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers