Should You Consider Investing in the Dow Jones' 3 Worst-Performing Stocks?

July 03, 2023: The stock market had a positive month in June, with various factors such as favorable economic data, declining inflation, and the Federal Reserve’s decision to pause interest rate hikes contributing to increased investor confidence. However, the Dow Jones Industrial Average (DJIA) did not perform as well as other major indexes, primarily due to its lower exposure to the booming tech sector.

Despite the overall positive trend, a few underperforming stocks within the Dow existed. This article will examine the three worst performers and assess whether they present an opportunity for investors.

1. Walgreens Boots Alliance (WBA): Walgreens has faced ongoing challenges as its efforts to expand into healthcare services and grow through acquisitions have yet to yield the expected results. The company is still grappling with the comparison to the surge in demand for COVID-19 tests and vaccines. Last month, Walgreens experienced a decline in stock value after reducing its full-year guidance and projecting modest bottom-line growth for fiscal 2024. While the stock may appear inexpensive following the sell-off and offers a high dividend yield, it would be prudent for investors to wait for more evident signs of a turnaround before considering an investment.
2. Salesforce (CRM): Unlike most tech stocks that saw positive movement in June, Salesforce experienced a decline. This came despite the company surpassing analyst expectations in its first-quarter earnings report and raising its full-year earnings guidance. Although Salesforce has been focused on cost-cutting measures and improving margins, its revenue growth has slowed. However, if the company can reaccelerate its growth rate, there is potential for the stock to rebound.
3. UnitedHealth Group (UNH): As the nation’s leading healthcare company, UnitedHealth Group underperformed in June due to concerns about rising costs associated with an increase in elective surgeries among older adults. Delayed surgeries during the pandemic have created a surge in demand, likely impacting the company’s bottom line. However, UnitedHealth’s diversified healthcare portfolio, including Optum Care, positions it well for future growth. Given the company’s historical performance and the anticipated rise in healthcare spending as the baby boomer population enters retirement, investors may consider taking advantage of any dips in the stock price.

While these three stocks experienced setbacks in June, it is essential to consider the broader market context and the specific challenges each company faces. Investors should conduct further research and analysis to determine if these stocks align with their investment goals and risk tolerance.

In conclusion, investing in the Dow Jones’ worst-performing stocks from June requires careful consideration. Walgreens, Salesforce, and UnitedHealth Group have unique circumstances that contributed to their underperformance. Investors need to assess each company’s prospects and determine if the current stock prices present an attractive opportunity for long-term investment.

Note: The information provided in this article is based on online sources.