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Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return in the past five years is 121.4%. But there is no question some big-name stocks performed better than others along the way.
GE’s Trainwreck: One of the worst-performing, high-profile U.S. stocks of the past five years has been industrial giant General Electric Company (NYSE: GE).
GE has been one of the blue chip stocks in the U.S. market for over a century and was one of the original Dow Jones Industrial Average components. But a difficult energy environment coupled with some questionable accounting, ill-timed investments and poor balance sheet management created a perfect storm for GE investors in recent years.
At the beginning of 2016, GE shares were trading at around $30. They topped out at around $33 in mid-2016 and traded mostly above the $28 level through mid-2017. Then the bottom fell out.
From that point, the stock plummeted ceaselessly for the next 18 months or so, as profits evaporated, growth stalled and the company slashed its dividend and reported major write-downs associated with its dubious past accounting practices. The stock eventually bounced at the $6.66 level in late 2018 on optimism that the worst of GE’s struggles were finally in the past.
GE In 2021, Beyond: GE peaked at $13.26 prior to the COVID-19 pandemic sell-off, which pushed the stock back down to $5.48 in March, its low point of the past five years. GE has since rebounded to above $11. The company paid a $200 million settlement to the SEC in late 2020, seemingly closing the book on its accounting issues.
GE investors that bought and held on through a volatile five-year period still took a huge hit. In fact, $1,000 worth of GE stock bought in 2016 would be worth about $454 today, assuming reinvested dividends.
Looking ahead, analysts expect GE to continue to recover in the next 12 months. The average price target among the 17 analysts covering the stock is $13 suggesting 18.3% upside from current levels.
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