3 Dow Jones Stocks to Buy for a 2017 Breakout

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Dow Jones - 3 Dow Jones Stocks to Buy for a 2017 Breakout

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The Dow Jones Industrial Average is moving higher for the fifth consecutive session Wednesday, continuing the recovery from last week’s politics-driven selloff. The bulls have returned the index to the 21,000 level — marking the resistance point of a long consolidation range going back to March.

3 Dow Jones Stocks to Buy for a 2017 Breakout

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Are we on the verge of a breakout? Much depends on the realization of the widely expected economic bounce back in the second half of the year and a continuation of the earnings growth enjoyed in the first quarter.

A Federal Reserve interest rate hike is all but a lock for June, but uncertainty remains around the timing of subsequent hikes as well as a possible start to a balance sheet rolloff. Politics, as usual, remain a wildcard.

But many Dow Jones components aren’t waiting, surging to new highs today on strong bids. Here are three on the move:

Dow Jones Stocks to Buy: Coca Cola (KO)

The Coca-Cola Co (NYSE:KO) stock is trading up 1.4% in late-day trading, capping a 12% rise out of its mid-February low to return to its early 2016 highs. This complete a pirouette off of long-term trendline support (KO stock hasn’t violated its 200-week moving average since 2009) and is setting up a move to new all-time highs.

The company reported mixed results on April 25, with earnings of 43 cents per share missing estimates by a penny while revenues of $9.12 billion beat the $8.85 billion expected (but fell 11.3% from the year prior). Guidance was in line with estimates.

Investors rewarded management’s fresh focus on cost control, with 1,200 job cuts planned and expected to save $800 million.

Dow Jones Stocks to Buy: McDonald’s (MCD)

McDonald’s Corporation (NYSE:MCD) shares are enjoying a super-sized rally, up 1.3% in late-day trading to cap a gain of roughly 30% from its early January low. Shares surged following the reporting of strong earnings in late April, resulting in a bevy of analyst upgrades. Telsey Advisory Group noted ongoing operational improvements boosting same-store sales leverage and profit margins.

The company reported earnings of $1.47 per share on revenues of $5.68 billion (which fell 3.9% from the year prior, but was ahead of estimates). While this was the 11th consecutive decline in sales, it was the eighth consecutive earnings beat.

U.S. results were boosted from ongoing success in the All-Day Breakfast initiative as well as the launch of different-sized Big Macs.

Dow Jones Stocks to Buy: United Technologies (UTX)

 

United Technologies Corporation (NYSE:UTX) shares are pushing to new intraday highs on Wednesday, continuing a strong rise out of its October lows. Shares are up nearly 30% since then thanks to lingering “Trump-flation” tailwinds and strong quarterly results.

RBC Capital Markets raised their price target to $125 on April 27 on what they see as eventual upside to management’s 2017 guidance following a strong quarter. Future profitability should be boosted, in their view, by recent investments in high-return initiatives.

The company reported earnings of $1.48 per share (nine cents ahead of estimates) on a 3.4% revenue increase from last year.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/3-dow-jones-stocks-to-buy-for-a-2017-breakout/.

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