|Day's Range||0.7000 - 0.7900|
Shares of General Electric Co. dropped Monday, after UBS backed away from its bullish stance, citing significant outperformance in the face of continued power market weakness and a significant decline in interest rates.
Analysts at UBS see the General Electric narrative shifting from survival to a multiyear turnaround, though they downgraded GE stock on valuation concerns.
Wall Street's three main indexes flitted between slight gains and losses on Monday, as declines in Boeing and bank stocks after Citigroup's quarterly report were countered by a rise in technology shares. The third-largest U.S. lender beat profit estimates but reported a decline in interest margins, with its shares marginally lower in volatile trading. The sequential squeeze on Citi's net interest margins by 5 basis points is a cause for worry for investors in other large banks, said Marty Mosby, director of bank and equity strategies at Vining Sparks in Memphis, Tennessee.
UBS downgraded General Electric stock to Neutral and cut its price target citing recent stock gains and lingering concerns over competition.
Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date. What Happened? On this day 23 years ago, popular cable news channel MSNBC was launched. Where The Market ...
General Electric shares dipped lower Monday after analysts at UBS cut the stock's rating and price target as it suggested investors "take a breather" from its recent gains.
Investment company Uncommon Cents Investing LLC (current portfolio) buys General Electric Co during the 3-months ended 2019Q2, according to the most recent filings of the investment company, Uncommon Cents Investing LLC. Continue reading...
Stand up and take a bow, Larry Culp. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsGeneral Electric (NYSE:GE) stock is having a fantastic year in the markets. GE stock is up 37% year to date, including dividends, in large part because of the moves you've made since becoming CEO on Oct. 1, 2018. However, before you get too excited, it's important to remember that General Electric stock is actually down about 5% in the nine months Culp has been the company's chief executive. There's a lot of work to be done before GE stock can hope to reach $20 for the first time since October 2017. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Normally, I'm big on letting your winners run and cutting your losers quickly. However, GE is a special case. Tim Nash, a contributor to Corporate Knights, the magazine dedicated to clean capitalism, recently pointed out a figure that ought to give those lucky enough (and brave enough) to have bought GE stock at the end of 2018 a reason to think twice about hanging on to General Electric stock. Nash reminded his readers that GE's valuation peaked at a bit below $600 billion in 2000. Today the market cap of GE stock is 85% less than at the beginning of the 21st century. Is it wise to press your luck with a company that's made so many bad calls in the past 19 years?Personally, I believe that J.P. Morgan analyst Stephen Tusa continues to be on target when it comes to evaluating the company's strengths and weaknesses. His recent criticisms of GE's Power business suggested that Larry Culp is more sizzle than steak. In time, we'll know if Tusa's right. In the meantime, the owners of GE stock who are sitting on substantial gains in 2019 are at a crossroads. Should they let their profits ride? Or should they cash in their chips for a handsome gain? Let the Profits RideInvestorPlace contributor Larry Ramer recently suggested that the turnaround of GE stock is real this time because it's got several catalysts that are driving its share price higher. According to Ramer, there are no smoke and mirrors. Exhibit 1: GE snagged $55 billion of engine orders at the Paris Air Show, well ahead of the $31 billion it generated just two years earlier. According to Barron's, taking the aviation's reported numbers at face value and using the valuation multiples of its peers, the division is worth as much as $100 billion, significantly exceeding the current market cap of GE stock. Exhibit 2: The promise of new power infrastructure in both the emerging and developed markets around the world is very good news. The $4-billion contract it recently got as a part of a consortium to build a hydropower plant in Africa is an example of how the company is able to work with Chinese companies. Power Construction Corp., a Chinese construction company that specializes in large infrastructure projects, is part of the consortium. Ramer's made a convincing argument why the moves Larry Culp has made to focus GE are paying off. The question is whether they'll be enough to continue to attract investors to General Electric stock. Sell GE Stock and Don't Look BackThey say you should never sneeze at a profit, especially one as large as GE's. To not consider taking profits off the table would be irresponsible, given GE's destroyed 85% of shareholder value since the turn of the century. InvestorPlace's Ian Bezek recently looked at the pros and cons of General Electric's business. He had lots of good things to say about the moves Culp has made to transform and turn around GE, the best of which was obtaining $21 billion for its biopharma business, which Bezek says appears to have been "a solid price." But ultimately, he came to the conclusion that the "new" GE just doesn't provide the same potential gains for investors that it used to. In other words, while it might regain positive free cash flow by 2020, its earning power won't be nearly as robust as it once was. As recently as 2014, GE had almost $21 billion of free cash flow. After selling so many divisions to tidy up its balance sheet, it's lost the ability to generate significant cash flow. Analysts like Stephen Tusa see that as a big problem. I would tend to agree with them. In my most recent article in June about GE stock, I pointed out that GE had a free cash flow margin of 24% in 2000. That's almost three times higher than its margin is expected to be in 2021. The cash flow-generating machine that once was GE is no longer. Don't look a gift horse in the mouth. Sell GE stock while you've still got a profit to talk about. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Should the Owners of GE Stock Take Their Profits? appeared first on InvestorPlace.
General Electric (NYSE:GE) shareholders have so far had a good year in 2019. Year-to-date, GE stock is up over 34%.Source: Shutterstock Most of the yearly gains came in the first two months of the year as investors seemed to believe that management would be able to create shareholder value in the long run.Between March and so far in July, GE stock has been trading in a range. Therefore investors are now wondering whether the bulls or the bears will have the upper hand in Q3.InvestorPlace - Stock Market News, Stock Advice & Trading TipsGE stock is expected to report earnings on July 31. Let us take a look at what may be in store for General Electric stock as we approach the earnings season. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond GE's Q1 Earnings and Long-Term CatalystsOn April 30, General Electric reported Q1 2019 earnings, when the group beat earnings and revenue forecasts on orders up 9%. EPS came at 14 cents vs. expected 9 cents a share.At present, the company reports revenue in six business segments: Power, Renewable Energy, Aviation, Oil and Gas, Healthcare, and Capital.General Electric's Aviation, Oil & Gas, and Healthcare businesses delivered steady revenue and earnings growth.GE Aviation business, which is the company's largest segment by revenue, primarily builds and services aircraft engines. Earlier in June, Wall Street welcomed the news that the conglomerate signed lucrative contracts at the Paris Air Show.The segment took significant orders for LEAP engines as well as long-term service agreements (LTSAs). Wall Street pay close importance to service agreements as over close to half of the revenues come from from after-market services.Our readers may be interested to know that several analysts believe that the GE Aviation, which serves both commercial and military aircraft markets, may be worth about $100 billion when GE's own market cap is only 89 billion. Therefore, long-term investors may want to pay attention to the growth trajectory of the Aviation segment.The Oil & Gas Division, which is a cyclical business, has now returned to profitability.In Healthcare, GE has robust exposure to the hospital and lab equipment market. Several analysts see the possibility of an IPO for Healthcare.Within a few quarters, the company is aiming to have a much smaller GE Capital operation. The unit reduced its liabilities as it completed $1.1 billion in asset reductions in the quarter.GE's industrial free cash flow is a key metric for many analysts and shareholders. For the quarter, it showed a loss of $1.2 billion. Shareholders cheered General Electric in general, but especially the Power segment, burned less cash than feared. A Year in Progress for GE StockIn March, CEO Larry Culp called 2019 a "reset year" and urged patience during what has been portrayed as a multiyear turnaround. Following a rotation of CEOs, Culp took over from John Flannery in October. And has had a busy nine months so far.Under new leadership, General Electric has been taking several strategic steps to slim the group down to a few core units and raise cash by divesting from several businesses that no longer serve the group.These moves to clean up the balance sheet include the recent sales of the biopharma segment of the company's healthcare operation to Danaher (NYSE:DHR), a smaller industrial player, for $21 billion and the merger of its transportation business with Wabtec (NYSE:WAB).As a side note, before joining GE, Culp had successfully headed and turned around Danaher, so industry watchers were generally supportive of the sale of the biopharma operation to the group.It has recently been reported that management would also like to sell GE Ventures, a diverse collection of over 100 startup companies.Long-term GE investors know that its Power division has had significant problems an sharp revenue declines in recent years. GE's core power product is the gas turbine.Wall Street is expecting the company to break up the Power segment in the coming quarters, a move that may benefit the GE share price.In other words through asset sales and spinoffs, GE is aiming to generate enough cash to reduce its $121 billion debt load and become more manageable.Last year, Culp took over a company with significant debt and unfunded pension liabilities and investors are understandably still nervous.Yet, overall, Wall Street approves the directional shift which seems to put the company on a stronger ground. And investors are reacting positively to these strategic moves that Culp has been taking.Turnarounds in industrial giants such as General Electric take a long time and never occur in a straight path. In the next earnings report, GE investors are likely to pay attention to improvements in individual segment margins and free cash flow trends. The GE Stock Price NowMany long-term shareholders know that General Electric stock price is a shadow of its former self. Let us go a bit back in history.In August 2000, GE stock hit an all-time high of $60.75. In October 2007, it was hovering around $40. By March 2009, at the heights of the great recession, General Electric's risky balance had sheet pushed the shares down to $5.73.In 2016, GE stock saw a decade-high of $33. But troubles for the General Electric share price began once again with 2017. Losses in the GE Capital unit and plummeting sales and profitability in General Electric's Power business put pressure on the stock.The market decline of 2018 pushed the shares once again to the single digits and in December of last year, the price saw a decade-low of $6.66.As of this writing, GE stock is hovering around $10.2. So Should Long-Term Investors Buy GE Stock?After years of continuous price volatility and decline, it is still proving hard for GE to regain investor trust for the long term.If you follow technical analysis, the long-term GE stock chart has been improving. In other words, bears are not in control of the stock price at this point as the worst has likely already been priced into General Electric stock.From a longer-term technical analysis perspective, I'd expect the stock to move up another 15-20% from the current levels within a year. Shorter-term, the stock will possibly continue to trade in a range, hovering around $10.I am also encouraged by the fact that GE stock's current price-to-sales (P/S) ratio is over 0.73x. Companies generate revenue from the sale of goods and services. Analysts prefer a low P/S ratio, ideally below 1. However, a P/S number between 1 and 2 is more common. To put the metric into perspective, S&P 500's average price-to-sales ratio is 2.1x.Another way to analyze the P/S ratio is to compare companies in similar industries or segments. Our readers may be interested to know that the P/S ratio for Boeing (NYSE:BA) is 2x. For Honeywell (NYSE:HON) stock, the P/S ratio stands at 3.2x. And for 3M (NYSE:MMM) the P/S is almost 4x.Investors who do not yet have a position may want to wait until GE's earnings report in late July to have a better view on the developments within individual segments. Analysts will pay special attention to the sales figures in different units as well as the level of free cash flow.Those investors who already own GE shares, may either consider taking some money off the table or hedging their positions. As for hedging strategies, covered calls or put spreads with Aug. 16 expiry could be appropriate as straight put purchases are likely to be expensive due to heightened volatility. Then, you may reevaluate your long position after General Electric reports earnings. The Bottom Line on GE StockOver the past few months, the narrative for General Electric stock has changed for the better and GE is not making regular negative headlines any more.I believe that many long-term investors are ready to give GE management, which has started dealing with the pressing issues, the benefit of the doubt. Therefore, I'd see any dip in GE stock price an opportunity to go long.The author has GE covered calls (July 12 expiry). More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post GE Stock Is Making the Right Moves to Build Investor Confidence appeared first on InvestorPlace.
William Blair analyst Nicholas Heymann thinks small and medium-size industrial companies will outperform the market, with one notable exception: General Electric.
Two people jumped a security fence at a GE Hitachi research reactor near San Francisco, the U.S. nuclear power regulator said on Thursday, raising concerns over a plant that is one of the few in the country that uses highly enriched uranium, a material that could be used to make an atomic bomb. The intruders jumped a security perimeter fence at the Vallecitos reactor in Alameda County on Wednesday afternoon, a 1,600-acre (647.5-hectare) site about 40 miles (64 km) east of San Francisco, the U.S. Nuclear Regulatory Commission said on its website in a security threat notice.
The U.S. economy is putting up some impressive numbers in GDP, jobs and wages, but many pundits fear that a slowdown is pending. Trade-war fears with China and the European Union remain front and center in the news. And the yield curve is threatening to invert, meaning short-term interest rates may be moving higher than long-term rates. That's often a sign of pending recession on its own.By some measures, the current expansion is now 10 years old, making it one of the longest on record. That seems ancient, but there's no rule that says it can't continue. Australia is in its 28th consecutive year of economic growth.Even so, all good things do eventually come to an end. And for the U.S. (and for Australia, for that matter), economists are looking for slowdowns. Even the Federal Reserve has indicated it is ready to lower short-term interest rates to combat any problems that may arise.Professional investment managers may look to sell a good deal of their holdings to step aside as the market falls. However, for most individuals, timing the market by selling when conditions seem dicey, and buying back when conditions firm up, is a big mistake. Even the pros don't always get it right, and they have armies of analysts and rooms full of technology at their disposal.Here are six ways to prepare for the next stock market decline. The key is to make smaller adjustments to your portfolio to reduce risk and still be ready to participate when the market resumes its upward march. SEE ALSO: 25 Stocks Every Retiree Should Own
Anheuser Busch InBev, General Electric, Bed Bath & Beyond, Morgan Stanley, and 7-Eleven are the companies to watch.
Fresh off a successful showing at the Paris Air Show, the outlook is looking strong for General Electric (GE). Its Aviation unit — which has been impacted by the Boeing 737 Max grounding — seems to be making up ground in the form of new orders on its LEAP engine in Paris. But more importantly, GE continues to lure investors back to its stock — share prices are nearing its 2019 high, as Wall Street is increasingly optimistic about its restructuring efforts. William Blair analyst Nicholas Heymann believes the enthusiasm is justified as he maintains his Outperform rating (To watch the analyst’s track record, click here)Heymann is a big fan of new CEO Larry Culp. The analyst says, “it is becoming increasingly clear that Mr. Culp’s enhanced, accelerated, and more dynamic plan to restore GE to fundamental and financial health is not only beginning to work but is now beginning to steadily accelerate.” Heymann sees the addition of Culp as a major reason why GE’s stock is up more than 50% since its 52-week low in December. Aside from (or because of) Culp, Heymann sees GE shares rising “as confidence grows that GE Power’s turnaround is likely to be successful and GE’s financial leverage continues to improve.” The analyst says that Culp has made it a priority to “totally transform GE Power by radically altering the way the business is managed” and keeping better track of the market in order to keep up with long-term trends. Another segment pertinent to GE success is its Aviation unit. The unit manufacturers jet engines, including the new LEAP engine that is used by Boeing for its 737 Max. While the MAX aircraft is currently grounded, GE was able to find other homes for the engine. For example, major news last months out of Paris was that GE and low-cost Indian airline IndiGo came to a $20 billion agreement to retrofit their Airbus a320s and a321 with LEAP engines. While the Max is expected back in the air soon, GE is making use of selling for other aircraft as well. Though GE continues to work to get out of the hole it created and has seen its stock surge in 2019, many analysts are playing the waiting game. TipRanks analysis of 10 analyst ratings shows a consensus Hold rating, with three analysts rating the stock a Buy, five suggesting Hold and two recommending Sell. The 12-month average price target stands at $10.50, which aligns evenly with where the stock is currently trading. (See GE's price targets and analyst ratings on TipRanks)Read more on GE: * General Electric: Skeptics Bet Against a Rebound * General Electric (GE): Important Lessons on Valuation * With the 737 Max Due Back Soon, Will GE Stock Move Higher? * Not Out of Woods Yet, But Is General Electric (GE) Stock a Buy? More recent articles from Smarter Analyst: * Can You Still Trust CannTrust (CTST) Stock? This Analyst Is No Longer Certain That You Can * Tesla (TSLA): Range Anxiety Is All Perception, but Still a Major Hurdle * Cannabis Stock HEXO to Benefit from Sector Chaos * Three Big Reveals as Jefferies Meets With Canopy Growth’s (CGC) New CFO
General Electric (GE) experienced a setback on July 10 after its workers at the GE Aviation Lynn facility rejected the company’s newly proposed four-year labor contract.
Jim Powell, editor of Global Changes & Opportunities Report, selected General Electric (GE) as his favorite investment idea for 2019. The stock has since risen 44%. Here's the growth stock expert's latest update on the industrial giant.
Traders reduced exposure to equities markets in June according to TD Ameritrade’s Investor Movement Index. The monthly review of investor behavior posted a slight decrease to 4.61 from its May score of ...
For General Electric (NYSE:GE), it has been a dreadful few years. GE stock, which reliably traded around $30 in 2016, sells for just a third of that value today. The company had to slash the dividend to nearly zero, and even that hasn't totally resolved concerns about the company's balance sheet and fiscal health going forward.Source: Shutterstock If you're a trader, you might be pleased with GE stock. It is up from $7 earlier this year to $10 now, which is a big move off the lows. But don't forget that a year ago, GE stock price was still $14. The move back to $10 has hardly repaired the colossal damage that shareholders have suffered over the past three years. With the stock market now at fresh all-time highs, the stock has continued to disappoint by comparison.GE's dismal stock performance is in the past, however. Is the recent move up from the low the start of a new recovery phase for General Electric? Or is this simply another little bounce before General Electric stock resumes its slump?InvestorPlace - Stock Market News, Stock Advice & Trading Tips A Company In TransitionNine months ago, GE got a new star CEO, Larry Culp. This wasn't GE's first attempt at fixing the executive suite. In 2017, General Electric elevated John Flannery to the top post to try to reverse the firm's sliding fortunes. But Flannery barely lasted a year. The company missed guidance quarter after quarter under his watch. The GE Board wasted no time in bringing yet another new chief executive. And in Larry Culp, it looks like they got a most capable leader.Culp previously served as CEO of Danaher (NYSE:DHR) from 2001 to 2014. During his time there, Danaher stock produced a total return of almost 500% for shareholders. Culp is the first outsider CEO to take the reins in GE's history and shows the company's willingness to do a total reboot to try to get back on track. For a company of GE's pedigree, it's quite a statement that they were willing to hire from outside the firm.Culp has shown plenty of willingness to make big moves in his young tenure. Already, General Electric spun off and then merged its transportation business, which has become Wabtec (NYSE:WAB). Culp made a huge sale in healthcare, unloading the biopharma operations for a huge payday. GE raised a few billion from selling part of its stake in GE Baker Hughes (NYSE:BHGE). And the list goes on.But there's plenty more left to do. As the GE stock price shows, the market isn't convinced that Culp has found the right formula to revive General Electric just yet. Let's take a deep look at GE stock's pluses and minuses as we are almost a year into Culp's turnaround efforts with the industrial giant. A Good Deal With DanaherIf General Electric is to return to its past glory, the first order of business is staying in business. The company needs to make it through this horrid stretch without selling or mortgaging away all its best assets. However, given the company's difficult financial situation, investors have rightly worried about what all GE will have to sell to make it through this down period. * 10 Best ETFs for 2019: The Race for 1 Intensifies On that note, General Electric should be commended for its recent biopharma sale. It managed to unload its biopharma division to Danaher for $21 billion. That appeared to be fully valued. Danaher shareholders weren't particularly ecstatic when they announced the deal, indicating that GE got a solid price. Don't forget that Culp used to be the head executive at Danaher, which likely gave him some flexibility while negotiating the deal.The $21 billion is in and of itself great news, giving the company the funds to tackle more than a third of its net industrial debt position. And, of arguably equal importance, by selling biopharma, it allowed GE to stay in healthcare. Previously, analysts had worried that GE would have to exit healthcare altogether in order to raise enough funds to right the balance sheet. GECAS: A Big Test Going ForwardOne of General Electric's most valuable assets is its jet engine leasing business. Returns in aircraft and engine leasing have historically been very attractive.Airlines tend to be hard-up for cash. And given the history of vast numbers of bankruptcies in the airline industry, banks tend to be cautious in their lending to airlines. Thus, for airlines to get capital at reasonable prices, they often have to engage with non-traditional lenders.GE is ideally suited for this. As the manufacturer of jet engines, it knows its industry about as well as anyone. It directly influences supply in the market, and has excellent information about the demand picture as well. Also, in the event of an airline default or bankruptcy, GE is ideally positioned to get its engines back into use at another airline. By contrast, a bank would be clueless about how to monetize an asset like that.Put all that together, and GE has built a fantastic business in engine leasing. However, many analysts have suggested that General Electric will have to sell it to raise funds. Also, leasing is a rather capital intensive business; it'd likely do a lot to boost GE's credit rating if they got out of the market.Thus, leasing is an interesting test of management. Larry Culp has said repeatedly that the leasing business is not for sale. If GE can make it through the cash crunch without selling leasing, it'd be a sign of strength. If they end up selling it over Culp's protestations, however, it'd be somber news for General Electric stock. Negative Free Cash FlowIn March, GE stunned investors when it warned that the company's free cash flow would turn negative for 2019. Even in a year as dour as 2018, GE still managed to bring in more than $4 billion of FCF. So going negative altogether was truly a huge surprise.With more reflection, however, it makes sense. The company's negative free cash flow is a culmination of many issues. These include the lost revenue related to Boeing's (NYSE:BA) plane crashes, the plunge in renewable power demand and the fall of GE Power's prospects, among other matters.GE expects its cash flow picture to look better in 2020 and especially in 2021 and beyond. But that may not be soon enough to salvage things for GE stock. As discussed below, GE is starting to run into issues in the credit market. The company's balance sheet has been questioned, ratings agencies have downgraded the stock, and funding costs are going up. Running negative free cash flow is a very bad look for General Electric as it tries to reassure its investors and creditors.However, the cash flow crunch may not be as bad as people fear. At least one analyst thinks so. Nicholas Heymann of William Blair came out with an analyst note this week that made the case for GE stock. Among Heymann's points, he expects GE's cash flow to surprise to the upside this quarter. Overall, Heymann sees the GE stock price as being worth between $14 and $16 per share. That'd be roughly 50% upside from today's prices. GE's Fiscal DifficultiesIn October 2018, Moody's downgraded GE debt by two notches to Baa1 from A2. That was a big blow for both the firm's reputation and access to capital going forward. And that downgrade came less than a month after S&P's own ratings action against GE.The next month, GE reacted by abandoning its use of the commercial paper market. Large companies with good credit can borrow short-term in commercial paper at attractive rates to fund temporary liquidity needs. When GE stopped using commercial paper, it made the market reassess the company's overall credit-worthiness.Since that point, the yields on GE Capital's various longer-term bonds have moved higher. That's in sharp contrast to the overall fall in interest rate yields as the Fed sets up to cut interest rates. This suggests that GE's credit worthiness continues to decline, even after the blockbuster sale of biopharma to Danaher.It also puts GE in a difficult place going forward with its capital division. A finance operation can't generate good sound profits if it doesn't have consistent reliable access to cheap funds. If GE can't reassure the market that it is a money good creditor, the capital division's value will be sharply impaired. The Shrinking GE PowerOne of the key building blocks of the new leaner General Electric was supposed to be GE Power. But these efforts have quickly run into trouble. That's because the demand from utilities for GE's products has slumped far more than folks had expected.Utility companies are now looking for just 25-30 gigawatts of capacity. That's way down from estimates of nearly 50 gigawatts as recently as 2016. The global economic slowdown and trade war worries have done little to help reverse this slump in sentiment. Plus, it turns out, electricity use simply isn't growing as fast as models had predicted years ago. More efficient appliances combined with slowing population growth has really cut into future electricity demand.As a result, GE has taken aggressive action to shrink GE Power down to size. It reduced the division's work force by 10,000 employees. In a related move, it has cut almost $1 billion a year in costs from GE Power. This will all help make GE Power more profitable -- or at least stem the losses from shrinking end demand. The division remains stuck with lawsuits, cost overruns and other headaches from previous management regimes, however. If GE stock is going to rebound sharply, GE Power has to perform better in the future. GE Power Faces An Explosive IssueFacing these difficulties, GE Power ran into a poorly timed public relations issue. After a large number of explosions, Brazil's grid operator suggested that GE's equipment was defective. Reuters reported that:"There are close to 700 pieces of that equipment in Brazil's grid, each costing up to 100,000 reais ($26,000). Power transmission companies have already launched tenders to buy replacement transformers while they discuss the costs and a schedule for the changes with GE and regulators."GE continues to claim that its equipment is not at fault. However, Brazil doesn't seem convinced of GE's innocence in the matter. China's State Grid corporation has expanded significantly in Brazil in recent years and could take a share of GE's business in that large country. Notably, Brazil is part of Mercosur -- a South American economic union -- that just reached a historic free trade agreement with the EU. This could bring in yet more competition for GE in that market. In any case, with GE Power already struggling, this Brazilian issue comes at a most unfortunate time. Don't Expect A Healthy Dividend Anytime SoonLast year, GE slashed its dividend to a mere penny per quarter. That move came on top of another previous dividend cut. You might be asking, why didn't GE get rid of the dividend altogether, as so many struggling companies do? For one thing, General Electric used to be a storied blue chip dividend payer. The company was viewed as a stable secure source of income for retirees and other risk averse folks. General Electric has a history of paying dividends continuously for decades, and by keeping a payment -- even a meager one -- it can keep at least some semblance of its past history going.Also, importantly, many mutual funds and exchange-traded funds have strict rules about what sorts of stocks they own. Many growth and income funds, for example, can't buy stocks that have no dividend. Many income-focused ETFs would also have to dump GE stock if the company eliminates the dividend entirely. So, in a weird way, even a tiny dividend is useful for keeping GE stock from slumping even farther.That said, don't look for GE to bring back a more robust dividend within the next few years. It is largely keeping the dividend for mechanical and sentimental reasons. It's not sticking with the dividend because it's a good use of capital. At this point, GE needs all the money it can muster to survive this horrid stretch of business that it is suffering through. Paying out a fatter dividend to shareholders would be irresponsible given the state of GE's balance sheet. If you want an industrial stock that provides a solid and steady stream of income, the 2019 version of General Electric stock is a bad choice. Forget Sunk Costs: Would You Buy GE Stock Now?In investing, it's always useful to think about what you'd do if you had no position already. If you were a neutral observer of General Electric, and had the option of buying it or rival industrial companies, what would you do? Most likely, you wouldn't buy General Electric stock right now.So if you hold GE, you should really pause and consider that. Do you believe GE stock is fundamentally a solid choice for your portfolio today? Or are you hoping that it recovers to its past glories, and that you are able to sell it for a profit? * 7 of The Best Schwab ETFs for Low Fees The stock market doesn't care what price we buy an investment at -- there's nothing magical about the cost basis for a position. Holding stocks simply to try to get back to break-even is a classic investor error that leads to massive opportunity cost and sometimes results in holding stocks all the way until they go bust.You get no extra reward for holding a losing stock for many years before it (hopefully) turns around. In the meantime, you suffer a large opportunity cost. With the stock market zooming higher, there are so many better investments that the average person could own instead of General Electric stock. Bottom Line on General Electric StockIf you believe in General Electric's turnaround story, $10 might still be a compelling price to buy at. It's not a fire sale, like it was at $7, but there's still a clear path to $15 or higher if management is able to execute and the economy remains strong. But I don't see the risk/reward for GE stock being particularly compelling at this price. If you're on the sidelines, there's no reason to get involved here.And if you do own GE stock, you should think about whether you are holding it because it has strong prospects, or if you own it hoping to recover losses or some other emotional reason. The General Electric that exists today is far different from the firm that existed in 2007, let alone back in Jack Welch's glory days.While Immelt, Flannery and Culp haven't totally broken up the old GE, the firm has lost so many pieces that had formerly made it great. GE's financials and banking business in particular was a huge boost to earnings. That's largely gone now, with small pieces left here and there. Even if General Electric recovers, it's unlikely to regain its former glory.As a much more pure-play industrial firm, there's simply not the sort of upside that you had when GE was an industry-spanning conglomerate. And with this economic recovery already so well-advanced in years, it's worth asking: What will happen when industrial-heavy GE stock faces the next recession? For now, General Electric doesn't offer enough reward to justify the risk.At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post Can Larry Culp Really Save General Electric Stock? appeared first on InvestorPlace.
The Invesco Powershares Water Resources ETF (PHO) is based on the NASDAQ OMX US Water Index. The fund’s top holdings include Roper (8.30%), Ecolab (8.23%), Danaher (8.17%), Waters (8.16%), and American Water Works (8.06%). It’s primarily two of these holdings that have turbocharged PHO this year— Danaher and Roper.
Members of a labor union representing thousands of General Electric Co. workers have voted down a proposed labor agreement, raising the possibility of a strike at GE’s Lynn plant and other locations nationwide. The local chapter of IUE-CWA, which represents workers at GE Aviation’s Lynn facility, told members in a statement Wednesday to “prepare for a strike” following the vote. For now, the employees are to report to work as usual.
Locals in Schenectady and Lynn, Massachusetts, both said that their members had voted against the deal. While the majority of total voters across the participating GE unions approved the contract, the rejection by the individual locals were a major blow to the deal because of the voting rules.
General Electric (GE) has risen ~41% year-to-date, and one Wall Street analyst believes it still has more upside potential.