| NEW YORK
NEW YORK The big shakeup in the Dow Jones industrial average's membership may yield some surprising results when it comes to stock performance.
By one measure, at least, the index's three "has-beens" - Hewlett-Packard Co (HPQ.N), Alcoa Inc (AA.N) and Bank of America Corp (BAC.N) look like they have significantly more upside potential than do the newcomers: Goldman Sachs Group Inc (GS.N), Visa Inc (V.N) and Nike Inc (NKE.N).
An invitation to join the Dow has not always been a sign of good things to come for a company's shareholders, but getting the boot from the index has by no means meant disaster either.
Former Dow components such as Honeywell International Inc (HON.N), Altria Group Inc (MO.N), Monde International Inc MDLZ.N and Kraft Foods Group Inc KRFT.O have prospered since leaving the Dow.
At the same time, other former Dow stocks, among them Citigroup Inc (C.N), General Motors Co (GM.N), American International Group Inc (AIG.N) and Eastman Kodak Co, have struggled mightily. Citigroup is down roughly 90 percent in the last decade, when its share price is adjusted for a 1-for-10 reverse stock split, and Kodak is just trying to survive.
UnitedHealth Group Inc (UNH.N) and Chevron Corp (CVX.N) have out gained the Dow since being added as components.
And tech powerhouses Microsoft Corp (MSFT.O) and Intel Corp (INTC.O) are essentially unchanged in price over the past decade, while the Dow 30 has risen more than 50 percent.
Alcoa, Hewlett-Packard and Bank of America, on average, are undervalued by more than 30 percent, according to a valuation metric used by Thomson Reuters StarMine.
By contrast, StarMine's so-called intrinsic value for Goldman Sachs, Visa and Nike implies these three, on average, offer little to no upside from their current stock prices.
Goldman is the only one of the three new components with the potential for gain, according to StarMine. The investment bank, at $164.35 a share on Tuesday, trades at a discount of roughly 30 percent to its intrinsic value of $235.67, a potential 43 percent gain if the model proves accurate.
Nike, at $66.41, and Visa, at $183.69, are overvalued by 20 percent and 25 percent, respectively, according to StarMine.
Intrinsic value gauges a company's current stock price against its long-term earnings potential as estimated by the most accurate analysts covering the stock.
By this measure, the best pick of former Dow components is Hewlett-Packard, which StarMine estimates has an intrinsic value of $44.70 a share, compared with Tuesday's price of $22.20, a potential gain of more than 100 percent.
Bank of America, meanwhile, could rise 63 percent from its current $14.64. According to StarMine projections, its intrinsic value is $23.83.
Even Alcoa, which hasn't had a stock price north of $10 since May 2012, is seen having a potential gain of roughly 6 percent from its current price of $8.05, the lowest of any current Dow component.
(This version of the story corrects AIG company name and stock symbols for AIG and GM in paragraph 4.)
(Reporting by Chuck Mikolajczak; Editing by Steve Orlofsky)