Nasdaq November Dogs Show 4% To 11% Annual Upsides, Downsides

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 |  Includes: CA, CSCO, GRMN, INTC, JPM, KHC, KLAC, LLTC, MAT, MCHP, MSFT, MXIM, PAYX, PCAR, SPLS, STX, SYMC, VOD, WYNN
by: Fredrik Arnold

Results from Yahoo Finance tallied for NASDAQ 100 Index members as of market closing prices November 22 were compared to analyst mean target price projections one year hence. The resulting chart of that data shown below turned up ten stocks exhibiting 3.61% to 11.42% price upsides. Mattel, Inc. (NASDAQ:MAT) an El Segundo, CA based toy & game consumer goods firm with showed the lowest upside of those ten. Cisco Systems (NASDAQ:CSCO) the San Jose, CA based network technology purveyor once again exhibited the foremost price upside to lead the NASDAQ 100 Index.

On the downside, five stocks exhibited pending price slumps of 4.08% to 11.29% based on 1 yr. analyst mean target pricing. Microsoft Corporation (NASDAQ:MSFT) presented the weakest bear sentiment, while Paychex, Inc. (NASDAQ:PAYX) weighed furthest to the downside to most tempt hungry bears.

The charts above used one year mean target price set by brokerage analysts multiplied by the number of shares in a $1k investment to compare NASDAQ 100 Index stocks showing the highest upside and downside price potential into 2014 out of 20 selected by yield. The number of analysts providing price estimates was noted after the name of each stock. Three to nine analysts were considered optimal for a valid mean target price estimate.

This article reported results of the NASDAQ 100 Index as one in a series of index-specific articles devoted to dividend yield and price upside results. Seeking Alpha reader requests prompted this series of index-specific articles reporting dividend yield plus price upside results for several stock indices: Dow 30; Russell 2000; S&P 500; S&P Aristocrats; Russell 1000; NASDAQ 100; Champions; Contenders; Challengers; Carnevale's Power 25 & Super 29 lists combined as his Solid 40.

This report presumed yield (dividend / price) dividend dog methodology applied to any index and compared that index side by side with the Dow. Below, are the Arnold NASDAQ 100 Index top dog selections for November were disclosed step by step.

Dog Metrics Selected NASDAQ 100 Stocks by Yield

NASDAQ states:

"The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies."

Just three of nine sectors were represented in the top ten NASDAQ dogs by yield as of November 22 per IndexARB.com data. Technology had six firms in the top ten showing high forward looking yields. Vodafone (NASDAQ:VOD) claimed the top spot. The other five technology firms ranked third through seventh: Intel (NASDAQ:INTC); Garmin (NASDAQ:GRMN); Maxim Integrated Products (NASDAQ:MXIM); Seagate Technology (NASDAQ:STX); Cisco Systems . The remaining two NASDAQ high yield sectors for June included two consumer goods representatives, Kraft Foods Group, Inc. (KRFT) in second, and Mattel in the eighth slot. Two service firms in ninth and tenth places, Paychex , and Staples (NASDAQ:SPLS) filled out the top ten NASDAQ 100 dogs.

Dividend vs. Price Results Compared to Dow Dogs

The graph below displays the relative strengths of the top ten NASDAQ 100 dogs by yield as of market close 11/22/2013 compared to those of the Dow. Historic projected annual dividend history from $1000 invested in each of the ten highest yielding stocks and the total single share prices of those ten stocks created the data points shown in green for price and blue for dividend.

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Actionable Conclusion (1): NASDAQ 100 Was Bearish as Dow Dogs Chased Bulls

NASDAQ 100 top October dividend payers turned downward after October. Total single share price dropped 6.7% in that period. Aggregate dividend from $10k invested as $1k in each of the top ten NASDAQ 100 stocks rose 1.2%.

The November numbers obliterated a September and October overbought condition when aggregate single share price for the top ten NASDAQ 100 dogs exceeded dividend from $10k invested as $1k in each. Came October, the excess in price over dividend rose to $23 or 6%. In November dividend grew to exceed price by $7 or 2%.

For the Dow dogs, meanwhile, projected annual dividend from $10k invested as $1K in each of the top ten Dow dogs dropped over 1.1% since October, while aggregate single share price jumped up nearly 5.3%. The Dow dogs overbought condition in which aggregate single share price of the ten exceeded projected annual dividend from $1k invested in each of the ten grew some. The overhang was $125 or 33% in August, and expanded to $161 or 43% for September, shrank down to $111 or 30% for October, and expanded again to $140 or 38'% as of November 14. Most of this bull rally was triggered by JPMorgan Chase & Co. (NYSE:JPM) replacing Microsoft in the top ten Dow dogs this past month.

To quantify the top dog rankings, analyst mean price target estimates provide a "market sentiment" gauge of upside potential and was added to the simple high yield "dog" metric used to dig out bargains.

Actionable Conclusion (2): Wall St. Wizards Wish A 5.4% Net Gain from Top 20 NASDAQ 100 Dogs By 2014

Top twenty dogs from the NASDAQ 100 index were graphed below to show relative strengths by dividend and price as of November 22, 2013 and those projected by analyst mean price target estimates to the same date in 2014.

A hypothetical $1000 investment in each equity was divided by the current share price to find the number of shares purchased. The shares number was then multiplied by projected annual per share dividend amounts to find the dividend return. Thereafter the analyst mean target price was used to gauge the stock price upsides and net gains including dividends less broker fees as of 2014.

Historic prices and actual dividends paid from $20,000 invested as $1k in each of the highest yielding stocks and the aggregate single share prices of those twenty stocks divided by 2 created data points for 2013. Projections based on estimated increases in dividend amounts from $1000 invested in the twenty highest yielding stocks and aggregate one year analyst target share prices from Yahoo Finance divided by 2 created the 2014 data points green for price and blue for dividend graphed from the plus row in the chart below exhibiting the 5.39% net gain.

Factoring in a 1.5% loss from the five negative net stocks introduced above, a net net gain of 3.87% results.

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Yahoo projected a x% lower dividend from $10K invested in this group of 20 while aggregate single share price was projected to increase over x% in the coming year. Notice that price exceeded dividend signaling an analyst predicted overbought NASDAQ 100 index in 2014. The number of analysts contributing to the mean target price estimate for each stock was noted in the next to the last column on the charts. Three to nine analysts was considered optimal for a valid estimate.

A beta (risk) ranking for each analyst rated stock was provided in the far right column on the above chart. A beta of 1 meant the stock's price would move with the market. Less than 1 showed lower than market movement. Higher than 1 showed greater than market movement. A negative beta number indicated the degree of a stocks movement opposite of market direction.

Actionable Conclusion Three: Analysts Forecast 10 NASDAQ 100 DiviDogs to Net 5% to 13% By November 2014

Five of the ten top dividend yielding NASDAQ 100 dogs were verified as being among the top ten gainers for the coming year based on analyst 1 year target prices. So the November dog strategy as graded by Wall St. wizards shows as 50% accurate.

The ten probable profit generating trades revealed by Yahoo Finance for 2014 were led by Cisco's upside:

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Cisco Systems , Inc. netted $130.05 based on dividends plus mean target price estimate from thirty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 32% more than the market as a whole.

Maxim Integrated Products netted $122.68 based on dividends plus mean target price estimate from twenty-four analysts less broker fees. The Beta number showed this estimate subject to volatility 12% less than the market as a whole.

Kraft Foods Group, Inc netted $118.18 based on dividends plus mean target price estimate from seventeen analysts less broker fees. No Beta number was available for KRFT.

Wynn Resorts (NASDAQ:WYNN) netted $108.53 based on a mean target price estimate from twenty-four analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 63% more than the market as a whole.

Symantec Corporation (NASDAQ:SYMC) netted $96.54 based on a mean target price estimate from twenty-one analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 1% less than the market as a whole.

KLA-Tencor Corporation (NASDAQ:KLAC) netted $73.56 based on a mean target price estimate from nineteen analysts combined with projected annual dividend less broker fees. The Beta number showed this estimate subject to volatility 35% greater than the market as a whole.

Microchip Technology (NASDAQ:MCHP) netted $73.27 based on dividends plus mean target price estimate from fifteen analysts less broker fees. The Beta number showed this estimate subject to volatility 10% more than the market as a whole.

PACCAR Inc. (NASDAQ:PCAR) netted $62.10 based on dividends plus mean target price estimate from nineteen analysts less broker fees. The Beta number showed this estimate subject to volatility 66% more than the market as a whole.

Seagate Technology netted $59.85 based on dividends plus mean target price estimate from twenty-three analysts less broker fees. The Beta number showed this estimate subject to volatility 207% greater than the market as a whole.

Mattel netted $51.10 based on dividends plus the mean of annual price estimates from eleven analysts less broker fees. The Beta number showed this estimate subject to volatility 43% less than the market as a whole.

The average net gain in dividend and price was over 8.9% on $10k invested as $1k in each of these dogs. This gain estimate was subject to average volatility 40% more than the market as a whole.

Actionable Conclusion (4): (Bear Alert) Analysts Forecast 5 NASDAQ 100 DiviDogs to Post Net Losses of 2.9% to 9.9% By October 2014

Five probable losing trades revealed by Yahoo Finance for 2014 were:

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Microsoft Corporation lost $29.61, based on dividend and mean target price estimates from twenty-nine analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 21% less than the market as a whole.

Linear Technology (NASDAQ:LLTC) lost $34.67, based on dividends and a mean target price estimate by nineteen analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 24% more than the market as a whole.

Texas Instruments lost $50.96 based on dividend and a mean target price estimate from thirty analysts including broker fees. The Beta number showed this estimate subject to volatility 20% more than the market as a whole.

CA Technologies (NASDAQ:CA) lost $88.82 based on dividends and the mean of annual price estimates from ten analysts including $20 of broker fees. The Beta number showed this estimate subject to volatility 36% greater than the market as a whole.

Paychex, Inc. lost $99.21 based on dividend and a mean target price estimate from sixteen analysts including broker fees. The Beta number showed this estimate subject to volatility 6% less than the market as a whole.

The average net loss in dividend and price was over 6% on $5k invested as $1k in each of these five dogs. This loss estimate was subject to average volatility 11% more than the market as a whole.

The net gain and loss estimates above did not factor-in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible starting points for your index dog dividend stock purchase research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Disclosure: I am long INTC, MSFT, GE, MCD, PFE, T, VZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.