This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Allocate Assets to Buy-Rated Dow Stocks

NEW YORK ( TheStreet) -- My suggested allocation to stocks has been at a maximum of 50% focusing on utilities, brand name retailers and the buy-rated stocks in the Dow industrial average. The 15 buy-rated names in the Dow 30 provide this diversification. Among the 15 are three retail-wholesale stocks, two consumer staples stocks, four medical stocks, three multi-sector conglomerates, two utilities and one in the computer & technology sector.

On March 25 I wrote, 9 Consumer Staples Stocks at Risk of Reversion which included the buy-rated names in the Dow 30. On March 26 I wrote, Allocate U.S. Holdings to 14 Top Dow Stocks and since then three of the computer and technology stocks profiled in this post are now rated hold not buy.

Today www.ValuEngine.com shows that 63.7% of all stocks are overvalued, just below the 65.0% ValuEngine Valuation Warning threshold. The six sectors represented by the 14 buy-rated Dow stocks are overvalued; computer and technology by 15.6%, consumer staples by 26.1%, medical by 11.5%, multi-sector conglomerates by 9.1%, retail-wholesale by 17.5% and utilities by 13.0%.

Among today's 15 Dow stocks, all are trading above their 200-day simple moving averages showing risk of reversion to the mean even with buy ratings. All are overvalued vs. their fair value, which is the price at which they should be trading. As buy-rated stocks all are projected to gain between 5% and 12% over the next 12 months, but beware that nine have gained more than 12% over the last 12 months.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
HD $111.49 -0.52%
JNJ $98.44 -0.03%
HPQ $30.69 0.56%
MCD $96.17 0.43%
KO $39.49 -0.03%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs