There are only 30 stocks in the Dow. It's an exclusive club. So you'd think that getting kicked out of the Dow would be a bad sign for a company.
But that hasn't been the case for the three companies given the boot from the Dow last year.
Shares of Hewlett-Packard , which is in the news today after announcing it would split into two companies, are up more than 60% since it was told to not let the Dow door hit it on the way out in September 2013.
But the true standout is Alcoa. The stock has nearly doubled.
Alcoa has benefited from rising demand for aluminum. It also is a winner from Ford's (F) decision to use aluminum for the body of its latest F-150 truck. That should make the vehicle lighter and more fuel efficient.
Alcoa will report its third-quarter results Wednesday. Analysts expect profits to nearly double. It looks like Alcoa bulls can't wait!
And even though Alcoa should no longer be considered the official start to the earnings reporting period (out of respect for my colleague Mark Meinero, I will not use the term "season" since I know it's a pet peeve of his) some investors will still try and make Alcoa's earnings into something bigger than they really are out of sheer habit. (Sorry Catherine Tymkiw!)
Now does this mean that getting removed from the Dow is actually the cause of Alcoa's outperformance? Of course not.
It will be interesting to see if Alcoa, BofA and HP (or the HPs post split) can continue to do this well over the long haul. After all, they were removed with good reason. They were no longer as representative of the U.S. economy and stock market.
And there are plenty of examples of companies that were given the old heave-ho from the Dow and have languished since then. Citigroup (C) has lagged the Dow since it was given its walking papers in 2009. AIG (AIG) will probably never return to the heights it was at before the 2008 financial crisis caused it to be kicked out of the Dow.
Eastman Kodak was removed from the Dow in 2004. It eventually filed for bankruptcy. Sears (SHLD) has been in a long decline since its ouster from the Dow in 1997.
But for the past year at least, it didn't matter that Alcoa, HP and BofA are no longer included in the Dow. They are doing fine as more ordinary members of the S&P 500.
So it does look like a company can have a bright future as a Dow dropout. Now if only the same thing could be said for beauty school dropouts.
It might be a stretch to say this is a "best of times, worst of times" scenario in American banking, but more than five years since Wall Street hemorrhaged, some financial institutions are recovering better than others.
The nation's biggest banks just had their annual check up and the results were starkly different for two of the nation's largest financial institutions: Bank of America (BAC) and Citigroup (C).
Bank of America looked like MOREMar 27, 2014 2:24 PM ET
Have investors been listening to a lot of R.E.M. lately? Track 3 on the Document album (remember what albums are?) in particular.
It certainly seems that way. The market is loyal to the Bank of America. It's MOREPaul R. La Monica - Mar 6, 2014 1:12 PM ET
President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law on July 21, 2010. That was supposed to help prevent big banks and financial firms from doing the things that got MOREPaul R. La Monica - Dec 12, 2013 1:58 PM ET
Goldman's profits doubled. JPMorgan (JPM) and Citigroup (C) topped expectations. Next up, Bank of America.
The big banks have reported strong earnings this week, and traders on StockTwits are betting the trend will continue with Bank of America (BAC), which releases second-quarter results Wednesday.
$GS great numbers from banks. Now all eyes will turn to $BAC
Following a blockbuster report from Goldman Sachs (GS), shares Bank of America briefly rose above MOREBen Rooney - Jul 16, 2013 2:10 PM ET
This article was published in the June issue of Money magazine.
By Paul R. La Monica
Insider buying doesn't get as much attention as selling, but it can point you to good values.
With the S&P 500 near record highs, you're seeing a surge of insider selling. Normally the dollar value of selling tops buying by 8.5 to 1, according to TrimTabs Investment Research. In the first quarter, the ratio reached 10.5 to MOREMay 29, 2013 10:40 AM ET
It's that time of year again. Most of the nation's big banks have disclosed how much chief executives earned in 2012. While some had their compensation cut, others received hefty raises.
One caveat: Wells Fargo (WFC) CEO John Stumpf, who received $17.6 million in total compensation in 2011, is not on the list. Wells has not yet disclosed Stumpf's 2012 compensation.
Lloyd Blankfein: $21 million
The CEO of Goldman MOREBen Rooney - Feb 25, 2013 5:26 AM ET
Bank stocks have been on a tear in 2012. Monday was no different, as shares of big banks pushed the broader market higher.
Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all climbed more than 2%, while Wells Fargo (WFC) rallied more than 3%. AIG (AIG) shares were up after the company said it plans to sell its stake in AIA Group, a Hong Kong-based life insurance MOREHibah Yousuf - Dec 17, 2012 12:59 PM ET
As customers move toward mobile banking, is an online-only and branch-less bank the bank of the future?
Bank of Internet's CEO Gregory Garrabrants told an audience at an investing conference in San Diego last week that his bank, with roughly $2.4 billion in assets, can compete with its larger rivals because it's not weighed down by real estate costs and has a lean staff.
Garrabrants, speaking at Stocktoberfest, a conference run by social MOREMaureen Farrell - Nov 1, 2012 3:22 PM ET
Residents up and down the East Coast affected by Superstorm Sandy can at least breathe easy on one front: banking.
Most banks have told customers who were impacted by Sandy that they will waive fees through at least Wednesday.
Citigroup (C), Bank of America (BAC) and TD Bank (TD), said they'll waive overdraft fees on deposit accounts and late fees on all loans, as well as fees incurred from using other MOREMaureen Farrell - Oct 30, 2012 3:29 PM ET
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