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Stingy Investor Tip Sheet

A Lost Decade

Fully two thirds of the stocks in the Dow Jones Industrial Average are now trading below prices first seen more than a decade ago. That doesn't include dividends but it does factor in stock splits.

A few, like Verizon (VZ) and Bank of America (BAC) are nearing the 20 year mark. Alcoa (AA) is trading at levels seen in the summer of 1987. But General Motors (GM) is the worst laggard. You have to look back to the 1930s, or perhaps even earlier, for similar prices. That's according to several recent reports. But my puny database doesn't go back to the 1930s. So, I can't confirm an exact date in this instance.

The table below presents the grim stats. The Earliest column shows the earliest month in which the stock hit its current price. (Apart from GM, I considered the period starting in the early 1980s.) The Years column shows the number of years that have elapsed since the date indicated in the Earliest column.

I also draw your attention to the 17 Dow stocks trading at a P/E ratio of less than 10.

Stock	 Price	Earliest Years 	  P/E  P/B  P/S	Yield 
======= ======  ======== =====  ===== ==== ==== =====
GM	 $2.88	  ~1930s   ~70	    -	 - 0.01	0.0%
AA	 $6.85	Jul 1987  21.4	 3.24 0.44 0.22	7.2%
BAC	$11.25	May 1989  19.6	 9.78 0.44 1.25	8.4%
VZ	$26.50	Dec 1989  19.0	12.11 1.50 0.79	6.5%
DD	$21.95	May 1991  17.6	 6.28 1.76 0.66	6.1%
MRK	$23.56	Nov 1991  17.1	11.28 2.73 2.22	5.8%
C	 $4.71	Feb 1993  15.8	    - 0.35 1.27	7.7%
DIS	$18.73	Jun 1995  13.5	 8.22 1.12 0.96	1.7%
T	$24.51	Aug 1995  13.3	10.81 1.32 1.21	6.0%
BA	$37.11	Nov 1995  13.1	 7.25 3.16 0.42	4.0%
GE	$12.84	Feb 1996  12.8	 6.31 1.28 0.78	7.7%
JPM	$23.38	Feb 1996  12.8	10.77 0.77 2.07	4.7%
KO	$41.07	Apr 1996  12.6	15.96 4.12 3.04	3.5%
INTC	$12.23	Sep 1996  12.2	 9.75 1.79 1.73	4.3%
PFE	$14.45	Nov 1996  12.1	 9.25 1.56 2.15	7.9%
AXP	$17.23	Dec 1996  12.0	 6.10 1.74 0.66	3.7%
HPQ	$31.83	Jul 1997  11.4	 9.86 2.10 0.71	1.0%
MSFT	$17.53	Jul 1997  11.4	 9.27 4.89 2.66	2.7%
HD	$18.52	Oct 1997  11.1	 9.56 1.80 0.44	4.3%
IBM	$71.74	Oct 1998  10.1	 8.46 3.71 0.97	2.5%
CAT	$32.84	Apr 1999   9.6	 5.41 2.12 0.40	4.6%
WMT	$50.66	Apr 1999   9.6	14.66 3.06 0.50	1.8%
MMM	$56.79	Dec 2000   8.0	10.75 3.34 1.57	3.2%
UTX	$43.22	May 2001   7.6	 9.09 2.07 0.74	3.1%
KFT	$24.87	Jun 2001   7.5	11.43 1.45 0.89	4.3%
JNJ	$55.81	Aug 2001   7.3	12.64 3.53 2.50	3.0%
CVX	$64.40	Sep 2005   3.2	 5.58 1.65 0.53	3.5%
PG	$59.33	Sep 2005   3.2	15.80 2.94 2.18	2.5%
XOM	$68.51	Aug 2006   2.3	 7.41 2.98 0.80	2.1%
MCD	$52.91	Jul 2007   1.4	13.37 4.73 2.61	3.5%

Source: yahoo.com, msn.com, Nov 20, 2008



11/20/2008   7:00 PM EST   Permlink   save & shareMarkets



 
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