NEW YORK (TheStreet) -- Anyone who sold Alcoa (AA) and Hewlett-Packard (HPQ) to buy into Goldman Sachs (GS) , Nike (NKE) and Visa (V) lost out. Why would investors have done this? A year ago today, Goldman Sachs, Nike and Visa replaced Alcoa, Bank of America (BAC) and Hewlett-Packard as members of the Dow Jones Industrial Average (DIA) .
The two former Dow members, Alcoa and HP, have more than outperformed the benchmark's newer names. The S&P Dow Indices committee justified these changes due to the low share prices for the stocks removed a year ago. The Dow committee also wanted to further diversify sectors and industries in the Dow 30.
Let's look at how Alcoa and HP did, and consider how to profit from Nike's upcoming earnings report.
Alcoa should not have been removed. The company was on a clear path to recovery, as resurgent sales of new automobiles increased demand for aluminum. Investors who sold shares of Alcoa a year ago lost out on a year-over-year gain of 91%.
Hewlett-Packard should not have been removed either, as CEO Meg Whitman was successfully implementing the company's turnaround. Investors who sold these shares missed out on a gain of 72% year-over-year.
Yes, the new Dow components had solid year-over-year gains: Goldman up 12%, Nike up 17% and Visa up 9%. But former Dow member Bank of America still showed a gain just above that of Nike.