If GE drops to $ 10 ... I'm buying 1,000!

JPMorgan analysts see GE's earnings forecast coming in 'a step lower.'

Excerpt:

JPMorgan wrote in a note that it thinks General Electric's earnings per share will ultimately come "a step lower," as the $1 estimate isn't realistic. According to JPMorgan, the figure doesn't include continued restructuring or asset sales that will go to the company's balance sheet instead of its shareholders. "GE isn't a safety stock in a more volatile market," JPMorgan wrote. There is "zero" potential from cost cuts at the company and any possible breakup of the firm would result in "dis-synergies." Analysts cut their price target to $11 from $14, representing a 23.8% downside for shares from their closing price Tuesday. JPMorgan's new target is also well below Wall Street's average target price of $17.20, according to FactSet data.

J.P. Morgan Analyst Says GE Is Headed To $11. Here Are 5 Reasons To Ignore His Assertion
Excerpt:

1. First, there was no new negative news. His new $11 target is a huge 20+% decline from his previous $14 target, set only last month. His rationale, like the flawed Barron’s article, is simply a regurgitation of what everyone already knows and what he has already said. (See “General Electric: Barron's Shouts 'Beware!' That Settles It - Time To Buy” for explanation about the Barron’s article.)
2. Second, General Electric and its stock are in an area where contrarian investors and fund managers see potential. However, analysts, value investors and value fund managers see only risk. The value gauge to contrarians is high “negativity,” not some low fundamental ratio or two. A downtrend propelled by negativity reverses when a company and stock are at their worst. It can then rise when contrarian buyers have replaced selling value investors. That is where GE is now.
3. Third, a good analyst, while important to the investment process, is not necessarily a good manager. Investment managers depend on the information that analysts evaluate, but then the managers must make the decisions of why, what, when, and where (price) to buy, sell, pass or hold. Tusa’s arguments and visions cross over into manager territory.
4. Fourth, analysts are not doctors or lawyers – they are Wall Streeters. Therefore, we must always question what we hear/read. Their thoughts and suggestions can be sincere, but they do work in a fast moving, action-oriented environment that can get into an emotional mindset.
5. Fifth, Wall Streeters sometimes rush things along too fast. Tusa’s timing, ahead of these three events (including his own firm’s conference the next day) means any relevant information they provide are not in the now widely publicized $11 price. He can certainly go lower, but what if $12 or $13 or staying at $14 appears to be supported?

Comment: Meanwhile .... Warren Buffet is in the hunt 

GE to merge rail division with Wabtec in $11 billion deal https://t.co/SnlZhx1QcM via @WSJ

— James Peet (@jrpeet) May 21, 2018

Jack Donaghy would be pleased

GE to sell rest of NBC stake to Comcast for $16.7 billion
Excerpt:

General Electric Co said on Tuesday that it would sell the remainder of its stake in NBC Universal to Comcast Corp for $16.7 billion in cash, debt and stock. The largest U.S. conglomerate said it had raised its authorized stock buyback to $35 billion and plans to buy back $10 billion worth of shares in 2013.

Comment: Jack Donaghy / GE connection

Bids in for INGDirect

GE, Capital One Bid for ING Direct USA: Report

Excerpt:

General Electric (GE) and Capital One Financial(COF) submitted bids for ING's (ING) U.S. online bank last week in a sale that may raise about $9 billion, Bloomberg reported, citing people with direct knowledge of the matter.

Comment: Earlier post: Who will buy INGDirect? | Capital One's ING Play a 'Head Scratcher'

GE: part of the DJIA from the start

The really, really, really long-term record for GE

Excerpt:

This month marks the 115th anniversary of the Dow Jones Industrial Average and a related milestone for General Electric. The media turning up for a DJIA celebratory lunch two days ago learned that GE (GE) is the only company present in the average at its start in 1896 that is also a component today.

Alert! The preceding sentence is carefully couched because there were two brief periods in the very early 1900s when GE dropped out of the DJIA. Why? That's a mystery, said John Prestbo, editor and executive director of Dow Jones Indexes.

We can, on the other hand, add to the world's store of knowledge by telling you just how well GE's stock has performed over those 115 years and a bit more.

To begin with, says Trevor Schauenberg, a GE vice president who spoke at the lunch, the company's stock was first made available to the public in 1892 (J.P. Morgan and Henry Villard, dumping "Edison" from the company name, engineered the offering) and the price was $108 a share.

Today, taking into account splits that multiplied an investor's holdings, that same share is worth $92, 206.

Throw those dollar figures into a compound annual growth rate calculation for 119 years, and it turns out that GE's stock has risen at a rate of 5.8%.

Since the DJIA did not start until 1896, it has no comparable figure. But during the average's 115 years, it has risen at a lower rate, 5.4%.

The 5.8% rate of gain for GE's stock does not include dividends nor the reinvestment of dividends that commonly go into total return calculations. So Fortune asked GE's Schauenberg for a total return figure for the 119 years. And the answer is 9.7%.

Comment: GE, a good basic foundational dividend paying stock. Kathee's Father (deceased) was a GE engineer