Top 96%
GE has been pretty beaten down. I can't help but feel the institutions are going to start getting back in as this is just ridiculous valuation for a large-cap industrial jugernaut. They are trimming off excess sectors like appliances and seemingly stand posed to integrate new energy/environmental solutions hitting the market right now.
I've read the rough news, heard the forecasts of doom, blah blah. Stop playing on speculation and look at fundamentals. GE is doing fine.
Top 1%
guliamo
Jun 25 at 2:51 ET
I am looking at fundamentals and what I see is a company with shrinking earnings growth, negative cash flow and unimpressive profit margins. You are right that the P/E looks inviting (13) and I too have heard of these new technologies being researched by GE.. My fear is that conglomerates aren't good and researching effectively.. GE has 327,000 mouthes to feed and a bad economy will hurt them huge. Entering a process of layoffs always brings the stock price down.
And though I don't think GE is a risky investment, I can't be convinced to own this company over other, more focused large cap companies who have an org chart that I, or anyone else, can understand..
Top 13%
madmoola
Jun 26 at 9:11 ET
guliamo makes some excellent points, sounds about right to me
Top 96%
Imbythelake
Jul 01 at 12:31 ET
Good response, though I saw it verbatim on the Google boards before here =). I'm willing to weather a rough ride as long as they keep the payout consistent. There are better yielding buys out there, but I'm sticking with GE for at least 2-3 years, buying in more if it sinks to cost average.
Guliamo, do you see the companys trimming of its credit and appliance sectors as a positive move? I love diversity, but have never been a fan of credit/financial or consumer goods.
Top 1%
guliamo
Jul 02 at 1:07 ET
my issue isn't with the result , but with the process.. selling off these pieces is never a smooth transaction. The buyer will have stipulations and GE will have to lay off people with extra severance pay, close down retail / office locations and pay penalties - all things that aren't on the books..
I think GE's diversity can be achieved by holding a group of other equities which I believe will result in better yields. Take ABB for example, they compete with GE in the heavy machinery / pump projects and are a better positioned to win these projects because they are a swiss company (American companies have political issues in some countries).
On the engine segment I like CMI who are competing well. The media segment, I would stay away from (GE own NBC) and the nuclear technology segment can be covered separately as well.
It probably comes down to GE's management and how talented they are as a team, I don't have any insight on that.. my thought is though that the decrease in GE's value isn't a trend, recent losses in the financial sectors won't be gained back soon..
Cheers.