Look at the Dow Jones Industrial Average (.DJI)’s Big Winners So Far This Year

Almost all of Microsoft Corporation (NASDAQ:MSFT)’s gains have come in the past few months, as investors have finally gotten comfortable with the value proposition behind the stock. Despite persistent concerns about Windows 8, Microsoft Corporation (NASDAQ:MSFT) recently announced plans to provide its Windows 8.1 update to address concerns raised by early adopters of the operating system. In addition, the company has made some progress in the mobile space, assuming the No. 3 spot convincingly.

Microsoft has plenty of work left to do, but even after the recent run-up, shares still fetch just 11 times forward earnings estimates. Growth potential from moving Office software to a subscription-based model as well as its Xbox One next-generation gaming console could provide the drivers necessary to push Microsoft to even new heights.

Payment processors thrive on improving economic prospects, and American Express Company (NYSE:AXP) owes its rise to all-time highs to the health of consumer spending. Even though its rivals in the card-network business have far greater transaction volume and cards issued, AmEx nevertheless has the edge in income, because it’s willing to take on the credit risk of its cardholders.

AmEx has traditionally targeted upper-income customers, but expanding into the prepaid-card business should provide even more growth and expose the company’s brand to a new demographic group. That could spell even greater profits down the road.

Where will the Dow Jones Industrial Average (INDEXDJX:.DJI) go?
Recent turbulence in the broader market suggests that the Dow Jones Industrial Average (INDEXDJX:.DJI)’s second half might not be as lucrative as the first. Picking the right stocks, though, can get you better returns than the overall average, so be sure to look not just at how stocks have done so far in 2013 but whether they still have further reasons to move even higher.

The article Look at the Dow’s Big Winners So Far This Year originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends American Express and owns shares of Microsoft.

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