The Coca-Cola Company (KO), Wal-Mart Stores, Inc. (WMT), Microsoft Corporation (MSFT): The Dow (.DJI)’s 5 Most Loved Stocks

Page 1 of 3

Short-sellers may be enjoying a little bit of a victory, with the markets having their worst month in more than a year, but that victory only equated to having the iconic Dow Jones Industrial Average lose 4.4% for August. While optimists would certainly love that figure to be positive, in the grand scheme of things, this drop was pretty small.

Since hitting its decade lows during the Great Recession, the Dow has risen by more than 125% on the heels of a rebounding housing market, a jobs market that is delivering the lowest unemployment rate we’ve seen in five and a half years, and a strengthening financials sector that’s ripe with capital and now well prepared should another deep recession occur.

As you might imagine, not everyone agrees. A few days earlier we examined some of the Dow’s most hated companies — in essence, the companies that short-sellers are targeting the most — and found it to be riddled with metal, mining, and commodity-based stocks.

Today, we’re going to turn the tables and examine the five most loved Dow components. These are companies that just seem to consistently produce profits in any economic environment, and they often make for poor short-sale opportunities. More than just loved, these five stocks gives us insight into what to look for in steady businesses so that we can scour the markets and identify similar characteristics in other companies.

Here’s a look at August’s five most loved Dow stocks:

Company Short Interest As a % of Outstanding Shares
The Coca-Cola Company (NYSE:KO) 0.61%
Wal-Mart Stores, Inc. (NYSE:WMT) 0.63%
General Electric Company (NYSE:GE) 0.67%
Microsoft Corporation (NASDAQ:MSFT) 0.69%
The Procter & Gamble Company (NYSE:PG) 0.70%

Source: S&P Capital IQ.

Coca-Cola

Why are short-sellers avoiding The Coca-Cola Company (NYSE:KO)?

I consider the only injustice on this monthly list to be when The Coca-Cola Company (NYSE:KO) isn’t atop the most loved Dow Jones components. There are few brands, if any, that can rival the geographical diversification of Coca-Cola. With its recent expansion into Myanmar, there are now just two countries on the planet where Coca-Cola doesn’t sell its products. To further pat Coca-Cola on the back for its diversification, if you were to try one new Coke product every day, it would take you more than nine years to get through them all! With a steady stream of cash flow and a diverse range of products, short-sellers are keeping their distance from Coke.

Do investors have a reason to worry?

Nothing short of a global depression is going to cause serious worry among Coke shareholders. The Coca-Cola Company (NYSE:KO) is one of the most recognized brand names in the world, and it certainly spends a pretty penny more than its peers on advertising. Although it’s probably seen an end to its rapid expansion days, energy drinks and new offerings will keep the hamster spinning on the wheel, which should allow the company to continue to crank out slow but steady top- and bottom-line growth.

Source: WalMart, Flickr.

Wal-Mart

Why are short-sellers avoiding Wal-Mart Stores, Inc. (NYSE:WMT)?

The reason most short-sellers keep their distance from Wal-Mart has to do with its premier pricing power as America’s largest retailer, and its extremely low beta of just 0.33. To begin with, Wal-Mart is so large and capable of producing so much cash flow that it can simply undercut local business prices to drive business into its own stores and create loyal customers. The other factor here is its low beta — a measure of volatility. In this case, Wal-Mart Stores, Inc. (NYSE:WMT) is only about a third as volatile as the S&P 500. Short-sellers are rarely long-term-minded and usually out for the quick buck, which makes Wal-Mart an easy pass for many of them.

Page 1 of 3
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!