SNE vs. DLB: Which Stock Should Value Investors Buy Now?
General Electric GE recently launched a new company, AiRXOS, which will help in the integration of air and ground space to manage traffic for manned and unmanned vehicles. Being a wholly-owned subsidiary of GE, AiRXOS operates as a venture between GE Aviation and GE Business Innovations.
AiRXOS enables cities, organizations, states and local governments to cater to the increasing need for advanced Unmanned Traffic Management (UTM) capabilities as well as efficient Unmanned Aircraft Systems (UAS) operations. It facilitates safe and efficient management of unmanned and autonomous vehicles and systems by working on several programs including development of UTM infrastructures and advanced unmanned aircraft vehicles operations.
Separately, another arm of General Electric, GE Healthcare, announced that it will provide FlexFactory for cell therapy to Xiangxue Pharmaceutical Co., Ltd. FlexFactory is the integrated manufacturing platform of GE Healthcare that is based on single-use technologies. This will enable Xiangxue Pharmaceutical to digitize and accelerate manufacturing processes for their cell therapy clinical trials. In fact, this marks FlexFactory’s first application for cell immunotherapy drugs based on high-affinity and high-specificity T cell receptors.
General Electric is poised for long-term growth backed by improved performances from the emerging markets including India and China. In order to focus more on its core business activities, the company has increased its investments in key industrial businesses through restructuring, state-of-the-art technology and R&D initiatives. Notably, its three core segments — power, aviation and healthcare equipment — require advanced hi-tech products with a high degree of reliability. These products often generate higher margins and are likely to contribute to long-term growth.
This Zacks Rank #3 (Hold) company also generates solid free cash flow, which gives management an opportunity to invest in product innovations, acquisitions and business development. In addition, General Electric’s stringent cost-cutting measures are likely to boost its profitability. For instance, the company recorded higher margins in first-quarter 2018, driven by stringent cost-cutting and simplification initiatives. Additionally, it reduced industrial structural costs by $805 million in the quarter and is on track to exceed its cost reduction target of $2 billion in 2018.
However, in the past three months, shares of the company have lost 7.7%, underperforming the industry’s decline of 6.9%.
Some better-ranked stocks from the same space are Crane Company CR, Federal Signal Corporation FSS and Raven Industries, Inc. RAVN. All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crane exceeded estimates in the trailing four quarters, with an average positive earnings surprise of 2.1%.
Federal Signal outpaced estimates in the preceding four quarters, with an average positive earnings surprise of 16.1%.
Raven Industries surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 9.8%.
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General Electric Company (GE) : Free Stock Analysis Report
Raven Industries, Inc. (RAVN) : Free Stock Analysis Report
Federal Signal Corporation (FSS) : Free Stock Analysis Report
Crane Company (CR) : Free Stock Analysis Report
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