The Dow Jones Industrial Average is meant to serve as a proxy for the U.S. economy. The index is comprised of 30 blue-chip stocks that represent different sectors and industries. Known as the “Dow 30,” the index recently made a big change when it removed the stock of retail pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) and added the stock of e-commerce giant Amazon (NASDAQ:AMZN). The addition of Amazon has been largely viewed as a positive for the Dow. Walgreens had been a long-term underperformer that had dragged down the index.
While many people were happy to see Walgreens removed, the truth is that there are many stocks in the Dow 30 that have proven to be long-term disappointments. This helps to explain why the Dow’s performance has trailed that of the other major U.S. indices, the Nasdaq Composite and S&P 500.
Here are three Dow stocks to sell in March before they crash and burn.
Boeing Co. (BA)
Anyone still holding onto shares of aircraft manufacturer Boeing Co. (NYSE:BA) may want to sell before things get worse. BA stock has been in free-fall following a January incident that saw a door-sized hole blow open on a Boeing made aircraft mid-flight. The Federal Aviation Administration (FAA) has been investigating the matter, and now word comes that the U.S. Justice Department has opened a criminal probe.
Justice Department officials have reportedly interviewed pilots and attendants that were onboard the flight when the hole opened in the fuselage midair, and investigators have told some passengers that they could be the victims of a crime. Where this goes from here is not clear, but it is more bad news that is dragging down BA stock. Year-to-date, the company’s share price has declined 24%, bringing its five-year decline to 50%.
Intel (INTC)
Stocks of most microchip and semiconductor companies are surging this year. Not Intel (NASDAQ:INTC). The company’s share price is down 7% since the start of 2024, bringing its five-year decline to 18%. INTC stock continues to slump as the company lowers its outlook for the year ahead and delays construction on a new $20 billion microchip and semiconductor manufacturing plant in Ohio.
Intel has said that the delay in constructing the Ohio chip plant is due to “weak market conditions.” This at a time when demand for microchips and semiconductors has never been higher, fueled by a boom in artificial intelligence (AI) applications. Intel had expected to have the Ohio plant operational in 2025. Construction has now been pushed back to late 2026.
At the same time, Intel has lowered its forward guidance for this year, saying it is struggling with a slowdown in demand for its microchips, particularly in the personal computer (PC) segment. All these issues make Intel a Dow stock to sell in March.
Nike (NKE)
Sneaker and athletic wear giant Nike (NYSE:NKE) is another chronic under-performer when it comes to Dow stocks. Year-to-date, NKE stock is down 5%. Over the last 12 months, the company’s share price has declined 13%. Through five years, the stock is up 16%, compared to an 81% gain in the benchmark S&P 500 index. Reasons for the poor performance include a slowdown in China and bloated inventory levels, among others.
Most recently, Nike announced plans to cut 2% of its global workforce, or more than 1,500 jobs, to lower expenses amid what it too has cited as weak demand. Nike claims that retailers are lowering their orders for its sneakers and athletic apparel through wholesale channels, and that it continues to be negatively impacted by an economic slowdown in China, its second largest sales market. Nike had 83,700 employees last summer.
The company next reports its quarterly earnings on March 21. Nike had better show some improvement in terms of its turnaround strategy or the stock could really crash and burn.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
