The Dow 30 is a venerable group of blue-chip stocks known for their stability. So, it’s fair to say that none of these companies will cease to exist. But as investors know, market corrections can strike speculative and blue-chip stocks alike. That makes it look like it is time to focus on Dow stocks to sell.
The 30 Dow Jones Industrial Average (DJIA) stocks represent significant companies across various industries. However, as the last few years have shown, not every sector has always been a winner.
Consider the Magnificent 7 stocks, of which a couple are Dow components. These were the darlings of the market last year. But in 2024, not so much. And the Dow 30 is also loaded with some of the biggest consumer staples and consumer discretionary stocks. Those have been hit-and-miss for investors.
For long-term investors, many of these stocks are perfectly fine to hold onto for the long haul. Many of these stocks pay dividends that can help offset any short-term corrections with the stock. But if you’re a trader looking for short-term gains, these companies may not be it. Each one has short-term concerns that are likely to keep sellers in control.
Apple (AAPL)
Apple (NASDAQ:AAPL) is one of the Magnificent 7 stocks I touched on in the introduction, but 2024 has been anything but magnificent for the tech stalwart. AAPL stock is down 13.5% for the year, and even with the stock near its 52-week low, the selling may not be done yet.
On April 23, an analyst report forecasted that iPhone sales in China dropped by 19.1%. The company is now in third place in smartphone sales in the country, the world’s largest smartphone market.
The larger issue for short-term investors is Apple’s lack of clarity about where it fits into the artificial intelligence (AI) space. Perhaps more details will be available at its June Worldwide Developer’s Conference.
But before that, the company will report earnings, and they are likely to disappoint. S&P Global Market Intelligence forecasts that Apple will be one of the only S&P 500 stocks to report a year-over-year (YOY) decline in earnings for the first quarter. If true, the estimated drop is less than 1%, but when investors are looking for any reason to sell the news, Apple has to be at least considered as one of the Dow stocks to sell.
Boeing (BA)
The problems at Boeing (NYSE:BA) have become well-known. After closing out 2023 on a heater, BA stock is down 34% for the year, making it one of the leading Dow laggards. Some contrarian investors may believe the stock has become so bad it’s good. However, Boeing still belongs on a list of Dow stocks to sell.
That’s because the quality issues at Boeing can’t be dismissed as a one-off. Regulators are finding that this is a systemic problem. Of course, it can be fixed, and likely in short order. But at what cost to earnings? One of the reasons why quality control got away from Boeing was because it had become efficient at outsourcing much of the work to make parts. This is a fix that will expose shareholders to some short-term pain.
Current CEO Dave Calhoun is leaving the company in December. Whether Calhoun was responsible for the problem or not, that was a move that had to be made for the company’s reputation. It’s also worth noting that Boeing does play a role in the emerging space economy. But that’s not why the company is making headlines. Loose screws and door panels are. Until that changes, and with no dividend to reward your patience, it’s best to sit this out.
Disney (DIS)
Speaking of stocks that got so bad, they were good, which brings to mind Walt Disney (NYSE:DIS). The company had a disastrous 2022 and 2023 as the sum-of-its-parts narrative that had been such a benefit fell apart.
Theme park revenue indeed remains strong. However, Disney faces real challenges in making all parts of the business run like a well-oiled machine. The largest example is its Disney+ streaming service, narrowing its losses, but that’s not the same as saying the company is profitable. And since the “growth” comes from cost-cutting measures, it’s fair to wonder what happens if the streaming business is as good as it gets in terms of profit.
The company’s fourth quarter and full-year earnings report may have been a good first step. And it’s good to have the proxy battle between CEO Bob Iger and activist investor Normal Peltz behind it. But does it justify having DIS stock up 24% for the year? That’s what investors will have to decide.
On the date of publication, Chris Markoch had a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.