3 Stocks That May Be Kicked Out of the Dow Jones Industrial Average (and the 3 Stocks That Could Replace Them)

For more than 126 years, the Dow Jones Industrial Average (DJINDICES: ^DJI) has served as one of the most-watched barometers of Wall Street's health. When it debuted in May 1896, it had only 12 components, virtually all of which were industrial stocks. Today, it's a 30-component index comprised of historically profitable, mature, and diverse multinational businesses.

Yet the Dow has an inherent flaw -- it's a share price-weighted index. Instead of companies with larger market caps exerting greater influence over index price movements, such as we see occur in the S&P 500, stocks with higher share prices have more influence in the Dow. For instance, even though Apple is the largest publicly traded company by market cap, 16 other Dow stocks sport higher share prices than Apple, and therefore have more influence in moving the Dow Jones Industrial Average.

Since its inception, there have been more than 50 changes to the Dow's components. If a company struggles for too long or sees its share price become less relevant within the Index, it runs the risk of being kicked out. At the moment, three stocks look to be in danger of being kicked out of the Dow Jones Industrial Average. Here they are, along with the respective companies that might replace them.

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Source Fool.com