The Best and the Worst of the Dow in 2012


The Dow Jones Industrial Average gained 5.7% last year. But the index isn't a monolithic slab of stocks moving in unison. Indeed, only three tickers delivered returns within a percentage point of the index benchmark. Thirteen of the 30 blue-chip stocks did significantly worse, and 14 basically crushed the Dow as individuals.

So who, pray tell, were the Dow's biggest winners and losers last year? Will they bow for repeat performances in 2013? I'm glad you asked:

^DJI data by YCharts.

A year ago, fellow Fool Anand Chokkavelu called out Bank of America as the Dow's biggest upside opportunity. The megabank was coming off a disastrous 2011, where it was the worst stock on the Dow. Anand couldn't imagine Bank of America's price-to-book valuation staying at record lows for long, and Mr. Market has proven him absolutely right.

The banking sector remains risky until the American and global macroeconomic question marks straighten out once and for all, but Bank of America is still not expensive. You can find Anand's top three reasons to buy and sell Bank of America today in his brand-new special report on the stock. Just click here to dig in.

So the big bank went from worst to first in one year. Can Hewlett-Packard pull off another drastic turnaround in 2013?

Unfortunately, I don't see it. It took years to destroy the solid foundation supporting HP, and CEO Meg Whitman is saddled with an impossible turnaround task. The bottom is falling out from underneath HP's PC systems, and the company is turning into a printer specialist. Whitman needs to refocus and double down on the profitable enterprise side of the remaining business, but she's chasing gnats with a shotgun.

Color me surprised if HP shares double in 2013. Foolish tech analyst Andrew Tonner's top-to-bottom analysis of HP found a few bright spots but even more reasons for doom and gloom. Read up on Andrew's analysis in this special report.

The best bets for the new year
On the other hand, chip giant Intel looks poised to fill the Dow's big, glitzy turnaround role this year. The stock has been whipped like a red-headed stepchild lately, but the critics are missing the big picture. I'm so sure of Intel's pending spring-loaded comeback that I bought shares with my own money in December. Maybe you should, too.

And then there's Home Depot . The home improvement retailer is soaring on good news in the housing market. Homeowners are coming back to Home Depot and friends after a five-year hiatus. Some are sprucing up their homes for resale or putting finishing touches on their brand-new properties, while others simply don't feel the pressure of impending financial doom anymore. Moreover, the company has come up with tight cost controls and fiscal discipline in the lean years. Planning for the worst often sets you up to dominate when the bad times turn good again, and that's exactly what Home Depot has done here.

The housing bounce has only just begun, if you ask me. Powered by a recovering economy and a newfound trust in private-property values, Home Depot seems likely to score a solid repeat in 2013. Fellow Fool Jacob Roche would agree.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel needs to find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates for an entire year. Click here now to learn more.

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Fool contributor Anders Bylundowns shares of Intel, but he holds no other position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Intel and Bank of America. Motley Fool newsletter services have recommended buying shares of Home Depot and Intel. Motley Fool newsletter services have recommended writing puts on Intel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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