Vet67to82 (< 20)

A 4 or 8 Stock Market Proxy?

March 18, 2010 – Comments (4) | RELATED TICKERS: UTX , DD , DIS

A couple of articles recently suggested using the first 4 stocks, or all 8,  in the list to avoid fund fees and with a good daily correlation to the market, about 90% with the first 4, and 95 % with all 8 .  Here is the list:

3/18/2010 1:34 PM ET   Market Closes: 2hr 26min 

Symbl Price $ Chg % Chg Volume Bid Ask
(1) UTX 72.51 +0.32 +0.44 1,688,977 72.50 72.51  
(2) DD 37.02 +0.53 +1.45 10,130,953 37.02 37.03  
(3) DIS 33.71 -0.04 -0.12 4,648,927 33.71 33.72  
(4) XOM 67.31 -0.05 -0.07 15,875,875 67.31 67.32  
(5) AXP 40.88 -0.13 -0.32 2,988,544 40.88 40.89  
(6) VZ 30.36 +0.21 +0.70 5,388,400 30.35 30.36  
(7) IBM 128.65 +0.89 +0.70 2,774,077 128.65 128.67  
(8) WMT 55.79 -0.13 -0.23 5,428,561 55.79 55.80
 

 Curiously, the articles don't mention whether you should consider equal share numbers, or equal dollar amounts, or a different mechanism.  So, I intend to run the math myself based on the following fundamentals:   Hmmm!  Different Betas, Market Caps, etc ... so this ahould be interesting.  

(1)  United Technologies Corp (UTX)         72.43+0.24/+0.33% 12:33 PM ET
       Beta 0.97
       Dividend & Yield 1.70 (2.36%)
       Earnings/Share 4.12
       Forward P/E 13.64
      Market Cap. 67.84 Bil
      P/E 17.58
      Return on Equity 21.37
     Total Shares Out. 936.41 Mil
     Stock Scouter Rating:   7 out of 10

(2)  E I du Pont de Nemours and Co (DD)  37.01+0.52/+1.43% 12:37 PM ET
      Beta 1.38 
     Dividend & Yield 1.64 (4.56%)
     Earnings/Share 1.92
     Forward P/E 13.79
     Market Cap. 33.53 Bil
     P/E 19.32
     Return on Equity 25.17
     Total Shares Out. 903.84 Mil
     Stock Scouter Rating:   8 out of 10

(3) Walt Disney Co (DIS)  -0.20/-0.59% 12:40 PM ET
      Beta 1.15
      Dividend & Yield 0.35 (1.04%)
      Earnings/Share 1.76
      Forward P/E 14.72
     Market Cap. 65.11 Bil
     P/E 19.18
     Return on Equity 9.61
    Total Shares Out. 1.94 Bil
     Stock Scouter Rating:   7 out of 10
 
(4)  Mobil Corp (XOM)  67.12-0.24/-0.36% 12:42 PM ET
      Beta 0.43
     Dividend & Yield 1.68 (2.49%)
     Earnings/Share 3.98
     Forward P/E 9.24
     Market Cap. 317.03 Bil
     P/E 16.87
     Return on Equity 17.25
     Total Shares Out. 4.72 Bil
     Stock Scouter Rating:   7 out of 10
 
(5) American Express Co (AXP)   40.54   -0.47/-1.15% 12:43 PM ET  
     Beta 2.10
     Dividend & Yield 0.72 (1.76%)
     Earnings/Share 1.53
     Forward P/E 12.56
    Market Cap. 48.68 Bil
    P/E 26.42
    Return on Equity 13.78
    Total Shares Out. 1.20 Bil
    Stock Scouter Rating:    5 out of 10
 
(6)  Verizon Communications Inc (VZ)   30.34+0.19/+0.63% 12:46 PM ET
      Beta 0.62 
     Dividend & Yield 1.90 (6.30%)
      Earnings/Share 1.29
     Forward P/E 12.14
    Market Cap. 86.09 Bil
    P/E 23.53
    Return on Equity 8.76
    Total Shares Out. 2.84 Bil
    Stock Scouter Rating: 8 out of 10

(7)  International Business Machines Corp (IBM)   128.31+0.55/+0.43% 12:53 PM ET
     Beta 0.79
     Dividend & Yield 2.20 (1.72%)
     Earnings/Share 10.01
     Forward P/E 10.64
     Market Cap. 166.54 Bil
     P/E 12.81
     Return on Equity 74.37
     Total Shares Out. 1.30 Bil
     Stock Scouter Rating:  9 out of 10

(8)  Wal-Mart Stores Inc (WMT)   55.76-0.16/-0.29% 12:56 PM ET
      Beta 0.24
      Dividend & Yield 1.21 (2.16%)
     Earnings/Share 3.70
     Forward P/E 12.69
     Market Cap. 212.34 Bil
     P/E 15.23
     Return on Equity 21.19
    Total Shares Out. 3.81 Bil
     Stock Scouter Rating:  8 out of 10.: