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The Daily Dow LEXINGTON, KY. (October 30): Even though Imation is a tiny portion of our Dow portfolio (the result of a 3M spin-off), on a day like today, it bears mentioning as the top story. The company posted third-quarter earnings of 29 cents per share versus a loss of 4 cents per share a year ago, an impressive feat. But even more importantly, the two analysts following the stock were expecting only 12 to 17 cents per share.
Needless to say, the blowout quarter gave the stock a boost. Shares of Imation rose 21% today on the news. Imation is a data storage and imaging business which supplies a variety of products and services for the imaging and information industry.
Correction time! Yesterday I posted a glossary of three of the popular Dow Dividend strategies in what I thought was a helpful format. But I got so wrapped up in making the procedures as clear as possible, I overlooked an incorrect date. The returns I quoted were accurate, but the period should have been 1961 through 1995 (not 1965 to 1995 as I wrote yesterday). Here's the three-part primer again, with the correct dates. Sorry for the mixup.
Beating the Dow - Take the ten highest yielders among the 30 Dow Jones Industrial Average stocks and sort them by stock price, from least expensive to most expensive. Buy the five cheapest and update a year later. From 1961 through 1995, this approach has compounded at 15.75% annually.
Foolish Four - Do everything exactly as you would have for Beating the Dow to generate the list of five stocks. Now, throw out #1 (the cheapest stock) and buy a double helping of #2. So, 40% of your money goes into #2 and 20% each goes into numbers 3, 4, and 5. Since 1961, this approach has compounded at 16.82% annually.
Unemotional Value - For this variation you start with the same Beating the Dow order. But you would keep the number 1 stock unless it happens to be the highest yielding stock as well as the lowest-priced stock of the ten. Pick the first four on the list after performing this test. Then (and this part is optional), you would double the weighting of the first two stocks on the list so that each one gets one-third of your money and the third and fourth stocks each get one-sixth of your money. Since 1961, this approach has compounded annually at a rate of 18.97%.
If you'd like to see past Dow Reports, Historical Numbers, Current Rankings, or order a copy of MF Templar's 35-year Dow Spreadsheet, head to our Fool's School area and click the Dow Dividend Approach button. We have a full-blown area for the approach, primed and ready for your use.
Today's Dow Numbers
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