Positions I’m Watching: Salesforce, Amgen, and Honeywell

By: Stacey Nickens

Salesforce, Amgen, and Honeywell are all joining the Dow Jones before the market opens on Monday, August 31. The shift comes after Apple announced its stock split, effectively reducing the Dow’s exposure to the technology sector. The index will thus be replacing ExxonMobil, Pfizer, and Raytheon with the previously mentioned companies.

There is some evidence that being added to a major index increases a company’s share price. Additionally, Salesforce had a fantastic second quarter. Their revenue grew 29% year over year, which far exceeded estimates. Such growth could signal the company’s health and growth-potential. Moreover, their shares are trading close to fair value as of Monday, August 31. Similarly, Amgen is trading just above fair value on August 31 as the company has a hopeful economic outlook. Amgen’s cholesterol and migraine medications give them a strong pipeline that compliments their improved manufacturing efficiency. While the final Dow add, Honeywell, had a tough second quarter, the company still has an optimistic long-term outcome. Some of the company’s main sectors (aerospace, oil and gas, and commercial building) have taken a hit due to the pandemic. Yet, the company still has strong business practices that make it a good candidate for long-term growth. Like Salesforce and Amgen, Honeywell is trading slightly above fair value as of August 31.

What to learn about other investment opportunities? Read more about why I recommend home improvement stores, RV manufacturers, and the QQQ. 

Disclosures: Past performance is not a guarantee or a reliable indicator of future performance. All securities carry a unique set of risks subject to a variety of factors. There is no guarantee that these investment strategies will work under all market conditions or that they are are suitable for all investors. This material has been distributed solely for informational purposes and should not be considered as individual investment advice or recommendation. Individuals should consult their investment professional prior to making an investment decision.