10 Dogs Ready to Bark in 2004

Are the beaten-up, the troubled and the stodgy getting ready to outperform the technology and financial stocks that have starred for most of the rally that began in March?

The stars seem to be lining up that way, so I've put together a list of 10 dogs to consider adding to your portfolio for 2004.

Who makes the list? AK Steel (AKS Quote), Boeing (BA Quote), Electronic Data Systems (EDS Quote), HCA (HCA Quote), Merck (MRK Quote), Plum Creek Timber (PCL Quote), Scholastic (SCHL Quote), Schlumberger (SLB Quote), Disney (DIS Quote) and Washington Group International (WGII Quote).

In the last three months, the Dow Jones Industrial Average, dominated by the likes of General Motors (GM Quote) and Merck, has outperformed the Nasdaq Composite by almost 50%. In the period ending Dec. 12, the Dow has gained 6.1% and the Nasdaq just 4%.

Of course, you could have beaten both indices handily by owning shares of technology rockets like Yahoo! (YHOO Quote), up 24% in the last three months, or Cisco Systems (CSCO Quote), up 17%.

But you also could have beaten the indices with less risk if you'd owned the beaten-up shares of troubled companies such as Scholastic, HCA and Plum Creek Timber, up 13%, 15% and 14% in the last three months, respectively. And you absolutely could have crushed the indices and even those tech highfliers if you'd owned shares of AK Steel, where top management resigned en masse in September in the face of an unexpectedly large third-quarter loss of 47 cents a share, or Washington Group, which only emerged from bankruptcy reorganization in the summer of 2002. Those two stocks were up 54% and 31% in the last three months, respectively.

Release the Hounds These 10 dogs could run ahead in 2004
Company	Industry	2002 % Change*	1-Year % Change*	3-Month % Change*
AK Steel (AKS:NYSE)	Steel	-31.00%	-47%	54%
Boeing (BA:NYSE)	Aerospace	-15.2	26	11
Electronic Data Services (EDS:NYSE)	Information technology	-74.2	25	9
HCA (HCA:NYSE)	Hospitals	7.7	3	15
Merck (MRK:NYSE)	Pharmaceuticals	-3.7	-17	-17
Plum Creek Timber (PCL:NYSE)	Lumber, wood production	-17.4	35	14
Scholastic (SCHL:Nasdaq)	Publishing	-28.6	-18	13
Schlumberger (SLB:NYSE)	Oil services	-23.4	13	5
Disney (DIS:NYSE)	Media, entertainment	-21.3	35	15
Washington Group International (WGII:Nasdaq)	Engineering and construction	-31	132	31
*Using Dec. 12, 2003 closing price Source: MSN Money