Six months into the year, the Dow Jones Industrial Average (INDEXDJX:.DJI)s have delivered their best performance since the roaring bull market of the 1990s, with gains of almost 14% having sent the average up by more than 1,800 points. Even though the Dow Jones Industrial Average (INDEXDJX:.DJI) lost ground in June — the first down month all year — it still posted a respectable 2% gain for the second quarter.
But some of the Dow Jones Industrial Average (INDEXDJX:.DJI)’s stocks have done even better than the overall average. Let’s look at the four stocks that have more than doubled the return of the Dow Jones Industrial Average (INDEXDJX:.DJI) so far in 2013, with an eye toward what could be coming next for these companies in the second half of the year and beyond.
Many investors don’t understand how Hewlett-Packard Company (NYSE:HPQ) has managed to recover so strongly this year. After all, CEO Meg Whitman’s turnaround strategy still has a long way to go before it completely plays out, and it’s far from certain that Hewlett-Packard Company (NYSE:HPQ) will succeed in putting its PC legacy behind it and finding new avenues for strong growth. If you only look at 2013’s stock performance in isolation, you might come to the conclusion that investors are betting everything on a home run from Whitman and her team.
The key to HP’s gains, though, is the fact that the stock got beaten down so badly last year. As a result, even with the stock’s gains, HP still carries a price that offers some margin of safety even if things don’t go as well as its executive team hopes. Moreover, if things go well, there’s still some upside left for new investors in HP.
Ordinarily, when a company has a major product recall, it’s bad news for the stock. Yet even though The Boeing Company (NYSE:BA) had to ground its brand-new 787 Dreamliner aircraft early this year, the company managed not only to fix the plane’s battery problem and get the Dreamliner up and flying again but also to make its official launch of its stretched Dreamliner 787-10 at the Paris Air Show.
None of The Boeing Company (NYSE:BA)’s problems kept airlines and aircraft leasing companies from making initial orders of the Dreamliner, and the company sees a multi-trillion-dollar opportunity for aircraft sales in a number of different areas, ranging from the fuel efficient 737 MAX line of single-aisle planes to an eventual potential updated 777X that could improve on the large airliner’s fuel efficiency. All these opportunities give Boeing plenty of room to fly higher.