Is It Time to Buy the Dow Jones' 3 Worst-Performing July Stocks?

Some investors like to pick through the trash to find hidden gems. Looking at the worst-performing stocks in the Dow Jones Industrial Average is one way to do just that. But it won't always turn up good opportunities. In July, (NYSE: VZ), Merck (NYSE: MRK), and Honeywell (NASDAQ: HON) were index laggards. Here's a quick look at each to see if they are worth your time and energy.

Verizon is a telecom giant, with a huge cellular phone business and a notable legacy wired operation. The cellular business is very competitive, with service quality a key factor. That requires near constant spending to make sure the Verizon network is on par, if not better, than the competition. Right now there's a shift to 5G taking place. The problem for Verizon is that keeping up with all this spending is expensive, and the company is more leveraged than its closest rivals. It is fair for investors to worry about its balance sheet.

That, however, is not all. Grabbing headlines in July is the fact that Verizon and some of its peers may have material liabilities related to lead used in the legacy wired operations. That news hit in July and investors clearly decided the risks weren't worth the rewards with the stock, now that there was another potentially expensive issue to address. Most investors will probably be better off erring on the side of caution.

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Source Fool.com