Five major companies joined the FOX50 index on Tuesday, highlighted by American icons Ford (NYSE:F) and JPMorgan Chase (NYSE:JPM), each of which managed to excel in recent years despite extreme turmoil in their respective sectors.
The other three new additions to the consumer-friendly FOX50 consist of drug behemoth Pfizer (NYSE:PFE), health-insurance giant UnitedHealth Group (NYSE:UNH) and industrial heavyweight DuPont (NYSE:DD).
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The changes to the FOX50, which was created in 2007 when the FOX Business Network launched, were officially announced on Tuesday, marking the first major reshuffling of the index. As its name suggests, the FOX50 is a basket of 50 widely-held U.S. stocks that have a tie to consumers, ranging from technology and energy companies to consumer products and financial services businesses.
Much has changed in the business world since the FOX50 last received a makeover, including the depths and rebound from the Great Recession, the worst financial crisis since the Great Depression, the election of President Barack Obama and overhauls of the financial regulatory and health-care systems.
Ford is an obvious choice to join the FOX50 as the auto maker managed to avoid the bankruptcies and bailouts that plagued rivals General Motors (NYSE:GM) and Chrysler. While FOX50 member GM has bounced back -- enjoying the largest initial public offering on record -- it did so after a massive taxpayer-funded rescue and it lost market share to Ford.
Ford, which would have been hurt by the collapse of parts suppliers that would have accompanied all-out failures of its rivals, has seen its stock price surge, Shares of Ford have leaped north of 700% since the markets bottomed in March 2009, making it one of the best performers in the global markets over that span.
By coming to the rescue of Bear Stearns and absorbing Washington Mutual, JPMorgan also emerged from the Great Recession stronger than it entered it. While Citigroup (NYSE:C) and Merrill Lynch floundered, JPMorgan has grown as a household brand. It is likely to benefit from a recent uptick in major acquisitions as well as from the improving credit environment.
UnitedHealth, which has annual revenue of nearly $100 billion, will be closely watched in the wake of the Obama administration’s health-care overhaul. The company’s market cap has reached nearly $50 billion and its stock has already climbed over 20% in 2011.
It would be hard to argue with DuPont’s inclusion in the FOX50 as the company has its fingerprints on everything from agriculture and nutrition to chemicals and pharmaceuticals. Founded in 1802 and operating in about 90 countries, DuPont is often seen as a proxy for the global economy.
These five stocks will join an impressive roster of American corporate icons, including Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), General Electric (NYSE:GE) McDonald’s (NYSE:MCD), UPS (NYSE:UPS) and Wal-Mart (NYSE:WMT).
Of the stocks leaving the FOX50, several have run into trouble in recent years, including Sprint Nextel, which lags far behind rivals AT&T (NYSE:T) and Verizon Wireless. Likewise, Yahoo! has struggled to catch up to search leader Google (NASDAQ:GOOG) and has even ceded some of that ground to Microsoft (NASDAQ:MSFT).
The FOX50 has gained 2.68% so far this year, trailing gains seen from some of its rivals. Since its debut in October 2007, the index has slid 17%.
Here are the members of the Fox 50 sorted by year-to-date returns:
Fox 50 – 2011 Returns