LET'S GET READY TO RRRUMBLE. (Part 2)
Note: This is the second post of a two part "mini-series."
The Dow Jones Industrial Average shot up today as big DJIA news rocked the stock market. Effective September 23, 2013, three companies are being tossed out of the index, while three companies are being inducted to the DJIA as replacements. The news is the largest shake-up for the Dow in a decade. This post will discuss my initial thoughts about the three companies who are now a part of the index. My previous post outlined what I think of the companies who have been tossed out of the index (see link: http://caps.fool.com/Blogs/lets-get-ready-to-rrrumble/866148)
Goldman Sachs (NYSE:GS)
My opinion on Goldman will be rather short, since it is very well summarized in another Motley Fool piece you can check out here: http://www.fool.com/investing/general/2013/09/10/does-goldman-deserve-to-be-in-the-dow.aspx?source=itxsitmot0000001&lidx=5 Despite the amount of irk and ire Goldman Sachs draws from online forum ranters, there doesn't seem to be much standing in Goldman's way of continuing its market-trouncing results. I recommend buying Goldman Sachs stock.
Nike is the first consumer apparel manufacturer to be added to the Dow since the 1930's, so if this 3-for-3 swap already wasn't a big enough deal for you, Nike being added to the Dow certainly should pique your interest. The company has great exposure to international markets and shows no signs of slowing down. My only concern with Nike I can think of at the moment is competition from competitors like Under Armour (NYSE:UA). UA has made somewhat of a dent in Nike but is far from achieving the kind of success Nike has seen in the international arena. I'd recommend Nike in a heartbeat.
Visa has done quite well over the past year and seems to be sharing the credit card space well with rival MasterCard (NYSE:MA). My concern with Visa is the unstable nature of federal regulations and court proceedings. But, even that is slightly decreasing as recently the government seems to have "gone to bat" for Visa. Visa stock seems to me to be a better deal than MasterCard at its current price even though MasterCard is arguably better positioned for future growth and international exposure.
Not surprisingly, I think that all three stocks added to the DJIA will probably be great investments over the next couple of years. Obviously, people who know a LOT more than me about the stock market think so enough to warrant a big shakeup in the DJIA. But as I noted in my other blog post, all is NOT NECESSARILY doom and gloom for the three companies getting thrown out.