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Are the Dow's Laggards Worth Buying?

Matt Thalman
November 19, 2012

On Friday we saw Democrats and Republicans come together to discuss their differences on the upcoming fiscal cliff, and although they didn't have a solution, they at least agreed that one must be found. Additionally, both sides established areas in which they would compromise on. Investors liked what they heard, and the Dow Jones Industrial Average (INDEX: ^DJI  ) closed 45 points higher on Friday. And from the looks of it, the index will close even higher than that today. As of 1 p.m. EST, the Dow is up 1.3% to 12,757.

But last Friday's news is not the only reason markets are moving higher today. This morning it was reported that sales of existing homes rose 2.1% in the month of October. Total housing inventory is also down 1.4%, and we currently have just 2.14 million existing homes for sale. At the current sales rate, that represents a 5.4-month supply, the lowest inventory since the 5.2-month supply we had in February of 2006.

Currently there is not a single Dow component trading in the red, but there are a number of stocks which are down for the year. Since a number of investors like to trade out of old holdings and into new ones during this time of year, let's look at the three biggest Dow losers year to date and decide whether or not they're priced to buy.

Dumpster diving
The biggest Dow laggard of 2012 is Hewlett-Packard (NYSE: