Displaying items by tag: ge

(New York)

General Electric is a withered giant. Sure, it has ridden the comeback since the start of the pandemic, but it's so far off the $30 price tag of five years ago. However, Goldman Sachs sees a better future in the tea leaves for GE. In a memo to investors, Goldman set a $16 price target for GE and sees it as a ‘self-help’ success story. Goldman alludes to the repaired finances and leverage under the CEO Larry Gulp. Additionally, a global recovery, higher energy consumption, and better margins could push their stock higher, potentially a $20 price target. Earning projections remain strong for GE through the end of the year.

FINSUM: General electric is in a solid cheap position and Goldman might have been on to something as the stock lifted to $13 early in the week.

(New York)

The credit market taught investors a very good lesson in the Crisis (not that many of them were paid attention to). One of those lessons was that the first signs of weakness in the market should be taken seriously, as they can be indicative of a pending meltdown. This occurred in 2007 before the cataclysm in 2008. It appears to be happening again now, as both US and European credit marks are showing some fault lines. For instance, the downgrade of GE is seen as a sign of weakness very similar to what occurred with Ford and GM in 2005.

FINSUM: There has been an extraordinary credit boom since the Crisis and there are bound to be consequences. The question is what the extent of those consequences will be. The market is starting to feel a bit like musical chairs.

(New York)

If ever there was a “5 stock” piece that investors might want to read, this is probably it. Barron’s has published an article naming five stocks which will do well as rates rise. Interestingly, these choices are not based on macroeconomics (e.g. REITS do poorly as rates rise), but based on the actual underlying financial obligations of the companies, with pension obligations being the key factor. The five names that come out when one looks at the situation that way are companies which investors will be very familiar with: GM, Ford, Xerox, American Airlines, and General Electric. The piece summarizes the benefits this way, saying “In general, as the health of pension plans improve, so should balance sheets, cash flows, and earnings due to lower pension contributions and costs”.

FINSUM: These look like very good calls because they are not obvious, but the benefits will be in time. Very interesting to see GE on there given its struggles lately.