Five Cellar Dwellers

 | Jul 02, 2014 | 1:25 PM EDT  | Comments
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Dow 17,000 -- does it matter? I think it depends on the stocks. Pardon me for attempting to find bargains, but when I think about the Dow Jones Industrial Average's journey from 16,000, not only do I want to make a case for owning the winners, I want to search among the rubble for losers that could turn.

This brings me to five stocks that didn't have anything to do with the Dow's recent climb, the cellar dwellers: Verizon (VZ) off 1.8%, Boeing (BA) down 3.7%, Wal-Mart (WMT) shed 4.5%, Pfizer (PFE) losing 5.7%, and Procter & Gamble (PG) declining 6.2%.

Tackling Verizon is easy. You are getting a 4.2% yield while it integrated the amazing acquisition of Verizon Wireless. I say amazing because it is not often that you buy the rest of yourself and then get to accelerate your growth rate. Verizon, more than any company, perhaps save Apple (AAPL), has taken advantage of the low Fed rates and done the unthinkable: get 100% control of its best assets. It paid a ton for it, but Verizon's about to be a growth stock again.

Boeing's ridiculously weak. We coming up on the Farnborough International Airshow, which begins July 14, and the expectations for orders are incredibly low. The spike in oil has put a damper on airline orders, as did Delta's (DAL) surprisingly weak revenue for passenger mile metric, one that I am not fretting too much as one month does not a year make. Plus Congress lost a key advocate of the Export-Import Bank, which helps subsidize aircraft purchases by airlines, a nice advantage for Boeing against Airbus when Eric Cantor lost his candidacy and an Ex-Im bear was named the second-ranking Republican in the House. That, and not the numbers, has caused the 3.7% loss in this stock -- the biggest gainer in last year's Dow. I think that's a good, not bad, setup for this quarter.

Wal-Mart? Problematic. But this company has a lot of leeway to do something financial that can get it out of its rut. In the meantime, a slightly better-than-expected economy might bring in extra shoppers as this, alas, has become a giant GDP play through some fault of its own as the execution has been sloppy.

Pfizer shot itself in the foot with this AstraZeneca (AZN) nonsense. This clumsy attempt at snaring a tax-related boost in earnings via an inversion backfired horribly. The stench from that boneheaded play won't go away that quickly, but Pfizer is paying you 3.5% while you hold your nose and wait for the inevitable drug breakthrough or a better acquisition. Celgene (CELG) anyone?

Finally, there's Procter & Gamble. OK, I will say it: The new head of the Veteran's Affairs, former PG CEO Bob McDonald, was actually starting to make headway before the revered A.G. Lafley made his so far less-than-triumphant return to the company. You have to ask yourself, though, do you want to bet against a guy who, tomorrow, could split the company in two, Kraft style, and gin up 10 points or more? I sure don't. And a dividend that always grows, one that gives you a better-than-Treasuries 3.25%, especially after tax? How can you say tempting?

So, the case can and should be made for the Dow laggards in this jaunt to 17,000. There's value here, and someone less jaundiced than most will certainly exploit it.

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