One of our "Dogs" has been kicked out of the Dow.
Bloomberg reports "GE Kicked Out of Dow, the Last 19th Century Member Removed":
General Electric Co. suffered a crowning ignominy Tuesday as overseers of the Dow Jones Industrial Average kicked the beleaguered company out of the stock gauge it has inhabited for more than a century.
Once the world’s most valuable company, GE will be replaced by Walgreens Boots Alliance Inc., the Deerfield, Illinois-based drugstore chain created in a 2014 merger. The change will take effect prior to the open of trading next Tuesday. Down 26 percent, GE is the worst performer in the Dow in 2018, as it was last year, as well.
“Since then the U.S. economy has changed: consumer, finance, health care and technology companies are more prominent today and the relative importance of industrial companies is less,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. Adding Walgreens makes the index “more representative of the consumer and health care sectors of the U.S. economy.”
GE has also changed. It’s lost almost $140 billion of market value in the last year, spurring a plan to shed $20 billion of assets in a bid to realign businesses and cut costs as the company grapples with debt challenges and flagging demand. Chief Executive Officer John Flannery, who took over for Jeffrey Immelt last year, said in May there is no “quick fix” to the company’s problems.
Since it is already in our portfolio, we will hold it for the balance of the year and measure its performance against the DOW before we sell it.