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Charging Into Visa

Tickers in this article: AA BAC CSCO EBAY GS HPQ MSFT NKE V
NEW YORK (TheStreet) -- I have written many articles about what a great stock Visa is. Well, somebody else must also think it is a great company because it was added to the Dow Jones Industrial Average Tuesday alongside Nike and Goldman Sachs .

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It isn't everyday a company gets to join the DJIA. If it does, it means that another company must go. After all, there is only room for 30 companies.

With Visa, Nike and Goldman Sachs added, Alcoa , Bank of America and Hewlett-Packard have been kicked to the curb. This is the biggest DJIA membership change to take place in almost 10 years. Alcoa has been a member for 54 years, HP for 16 Bank of America for five.

What took so long?

In my opinion, these stocks are getting kicked out because of their lousy performance against the market over many years. Again, what took so long?

Let's begin with Alcoa.

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Alcoa has returned an average of negative 10% per year over the last 10 years.

Over the last five years, it has done even worse than that. The stock has averaged negative 20% per year. It sounds like the folks at Dow Jones are picking stocks for their index just like many individual investors pick their own. Buy big, stodgy, old company of yesteryear with good name recognition-Microsoft , Cisco , Hewlett-Packard, etc. etc. etc.

It makes you wonder where the Dow would be today had it kept its index a little more current.

Let's next check out another exile: Bank of America.

Data from Best Stocks Now App

The shares have done a little bit better than Alcoa, but not by much. Shares have averaged negative 6.4% per year over the last 10 years, and that includes the dividends. The stock has delivered an average negative 14% per year over the last five years. In addition, the stock was down a gut-wrenching 63% in 2008! This is hardly normal "blue-chip" behavior.