10 Most-Popular Dow Stocks Off to Rough Start - TheStreet

10 Most-Popular Dow Stocks Off to Rough Start

Taking a closer look at the 10 Dow Industrial stocks selected by the Stockpickr community to outperform this week shows some off to a shaky start.
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NEW YORK (Stockpickr) -- Let's take a closer look at the 10 Dow Jones Industrial stocks that the Stockpickr community has selected for our Beat the Dow! challenge.

The following are the community's 10 most bullish stocks of Dow Jones Industrial Average expected to beat the average, the

SPDR Dow Jones Industrial Average ETF

(DIA) - Get Report

and the

Dogs of the Dow

.

10.

AT&T

(T) - Get Report

, with 49 votes, was selected by a third of all Stockpickr voters, making it the community's 10th most-popular Dow stock.

AT&T has been rated by our stock model at buy since Aug. 27, 2009. This model recommendation attempts to look 12 months out into the future, overshooting our June 25 deadline.

Analyst Opinion

. With AT&T maintaining exclusive U.S. coverage of the new iPhone 4G, the company will not only keep existing customers but also add new ones. So over the next few quarters, I remain bullish for the stock. However, the stock has been in a sideways chop for the last few days. AT&T looks technically weak for the next few days and may not get a sympathetic pop until Monday when a huge number of iPhones are reported as sold.

9.

IBM

(IBM) - Get Report

received 50 Stockpickr votes, for a ninth-place ranking in our Beat the Dow list.

IBM has been rated by our stock model at buy since Feb. 17, 2009.

Analyst Opinion

. Last week, Jim Cramer bullishly referred to IBM as "really well-run" in his "Mad Money Lightning Round." I agree. IBM is doing good business in mobile enterprise software for its corporate customers. The stock, while a bit volatile, is in a short-term uptrend that may have legs.

8.

Johnson & Johnson

(JNJ) - Get Report

squeezed out 55 votes for eighth place.

Johnson & Johnson has been rated by our stock model at buy since Jan. 13, 2004.

Analyst Opinion

. Johnson & Johnson shares jumped higher on Tuesday on word of a potential Swedish partnership to develop a new

diabetes treatment

. New future revenue streams are certainly bullish.

7

Cisco Systems

(CSCO) - Get Report

was routed 55 votes by the Stockpickr community, securing it the seventh-place spot on our list.

Cisco was upgraded by our stock model to buy from hold on Jul. 23, 2009.

Analyst Opinion

. Cisco Systems is shaking off a bad month in May that sliced 14% off the stock. Comparing the trailing price-to-earnings ratio of 19.8 with the forward P/E of 13.1 shows the shares to be poised for a bullish run.

Who Owns Cisco? Ken Fisher Bill Nygren

6.

Coca-Cola

(KO) - Get Report

bubbled over into the sixth spot on our Beat the Dow list with 57 votes.

Coca-Cola has been rated by our stock model at buy since Oct. 24, 2005.

Analyst Opinion

. Of all Dow Industrial stocks selected to outperform this week, none have a prettier five-day chart than Coca-Cola, which systematically steps higher. No wonder

Warren Buffett

likes Coke.

5. The community smiled upon

Wal-Mart Stores

(WMT) - Get Report

with 60 votes, putting it in fifth place.

Wal-Mart has been rated by our stock model at buy since Feb. 26, 2008.

Analyst Opinion

. Wal-Mart stock is off to a bad start this week, slipping about 1%. News on Tuesday of Wal-Mart's capitulating to union demands that proposed that Chicago-area stores be built with union-only construction workers may be a move to appease a Chicago city zoning committee. However, this is bearish in that it really means that low-cost locations for new stores may be becoming scarce. Even if Wal-Mart succeeds in getting Chicago stores built, the local grocery store union would attempt to organize these stores, raise wages and unfortunately trim margins.

Who Owns Wal-Mart? Bruce Sherman Tweedy Browne

4.

Caterpillar

(CAT) - Get Report

dug up 60 Beat the Dow! votes, for a fourth-place ranking.

Caterpillar has been rated by our stock model at hold since its downgrade from buy on Oct. 14, 2008.

Analyst Opinion

. Caterpillar started off strong Monday morning and has done nothing but slide lower ever since. China's allowing its currency, the yuan, to strengthen should be bullish for this construction equipment exporter. Before adding to a Caterpillar position, it may be best to watch for the stock to reverse course instead of trying to catch the falling knife.

Who Owns Caterpillar? Ken Fisher Bill & Melinda Gates

3.

Intel

(INTC) - Get Report

chipped off 63 bullish votes, securing it the No. 3 spot on our list.

Intel has been rated by our stock model at buy since Oct. 13, 2009.

Analyst Opinion

. Intel is off to a slow start this week. If the company can conclude a settlement agreement with the Federal Trade Commission that does not admit guilt, the shares could jump. Unfortunately, you can't legally time news releases. The shares have been trending lower since mid-April and may not change course this week.

2.

Home Depot

(HD) - Get Report

constructed the second-most votes at 66.

Home Depot was upgraded by our stock model to buy from hold on May 18, 2010.

Analyst Opinion

. Home Depot shares collapsing more than 4% in two days is dragging down the entire Beat the Dow! portfolio.

Existing-home sales dropped 2.2%

in the U.S. in May instead of an expected 7.5% increase, which means perceived demand for home-improvement supplies has been overstated. This is bearish for Home Depot.

Who Owns Home Depot? Dodge & Cox Charles Brandes

1.

McDonald's

(MCD) - Get Report

sizzled at No. 1 with 73 votes, happily making a meal out of all other Dow components.

McDonald's has been rated by our stock model at buy since Mar. 2, 2004.

Analyst Opinion

. The success or failure of McDonald's is contingent on promoting its

franchise model

worldwide. On Tuesday, McDonald's shares gave back all of Monday's advance and more. Even with the pullback, McDonald's is trading near its 52-week high of $71.84 and may finish the week strong.

Continue to check in at the Beat the Dow!

results page

to see if your favored Dow stock is keeping pace with the pack.

-- Reported by Kevin Baker in Jupiter, Fla.

RELATED LINKS:

>>10 Dow Stocks to Buy Now

>>Beat the Dow: Will Collective Wisdom Prevail?

>>5 Stocks Set to Rise This Week

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Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.