GE Aug 2019 9.500 call

OPR - OPR Delayed Price. Currency in USD
0.0000 (0.00%)
As of 3:10PM EDT. Market open.
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Previous Close0.0100
Expire Date2019-08-23
Day's Range0.0100 - 0.0100
Contract RangeN/A
Open Interest13.28k

    Weekly Top Insider Buys Highlight for the Week of Aug. 23

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  • Will Harry Markopolos’s Allegations against GE Stick?
    Market Realist

    Will Harry Markopolos’s Allegations against GE Stick?

    Madoff whistleblower Harry Markopolos has GE in his sights, and he’s armed with 175 pages and a website dedicated solely to his newfound cause.

  • Bloomberg

    Who Is Harry Markopolos’s Mystery GE Short Seller? No One Is Talking

    (Bloomberg) -- When Harry Markopolos dropped his bombshell report skewering General Electric Co., he revealed that he was working with a short seller to profit from the stock’s decline. More than a week later, that firm’s identity remains a mystery.Markopolos has offered few details about his partner, saying only that it’s a midsize hedge fund based on the East Coast -- and one not normally known for shorting. “I promised confidentiality,” the accounting examiner said on CNBC.Off-the-record conversations with a number of players in the short-seller community haven’t turned up much intel either. Most people seem to be at a loss.That has only added to the intrigue and the questions being floated in the hallways of hedge funds, investment banks and GE itself. Why is the short seller staying in the shadows? Is the firm worried about legal risks? Does it want to avoid publicly attacking an iconic company? Is it less confident than Markopolos?Of course, Wall Street being Wall Street, the name could slip at any moment, even if there’s a nondisclosure agreement involved.And there could be a lot riding on that identity. If it turns out to be a well-respected name, that could reinvigorate a short trade that had knocked more than $7 billion from GE’s market value through Thursday. On Aug. 15, the day of the report, GE plunged 11%. The shares fell 5% to $7.78 at 12:02 p.m. Friday amid broad market declines.If it’s a no-name player, well, that may just help support Chief Executive Officer Larry Culp’s contention that the report was “market manipulation, pure and simple.”(Updates with share movement in sixth paragraph.)\--With assistance from Katia Porzecanski, Katherine Burton, Hema Parmar and Katherine Chiglinsky.To contact the reporter on this story: Richard Clough in New York at rclough9@bloomberg.netTo contact the editors responsible for this story: Brendan Case at, ;David Papadopoulos at, Tony RobinsonFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • General Electric Falls 3%

    General Electric Falls 3% - General Electric (NYSE:GE) fell by 3.05% to trade at $7.94 by 09:35 (13:35 GMT) on Friday on the NYSE exchange.

  • Prince Harry’s Shaming Is Bad News for Private Jets

    Prince Harry’s Shaming Is Bad News for Private Jets

    (Bloomberg Opinion) -- Given the swelling ranks of the world’s billionaires, you’d have thought the past 10 years would have been fabulous for private jet suppliers.In reality, the period since the great recession has been a “lost decade” for the industry’s manufacturers, analysts say. A glut of second-hand aircraft sapped demand for new models, while shared ownership and renting became popular alternatives to buying a plane outright. Meanwhile, large corporations that once thought nothing of jetting their execs around in comfort started scrutinizing budgets and worrying about conspicuous excess. In 2017 General Electric Co. said it would sell its fleet after unflattering reports about its former boss, Jeff “two planes” Immelt.The industry seemed to have turned a corner recently thanks to the U.S. economic recovery, a fresh lineup of bigger models, plus tax giveaways from President Donald Trump that made it much cheaper to purchase a plane. North America is expected to account for more than half the global market for private jets in the next five years, according to Honeywell International Inc.Yet suppliers face another looming threat: Our rapidly heating planet might make boarding a fuel-guzzling jet seem unconscionable. In Sweden there’s even a word for this new aversion to flying: flygskam or “flight shame.” Are the super-wealthy 1% susceptible too?It’s not just climate campaigners who think the industry has an image problem. Warren East, chief executive of the jet engine-maker Rolls-Royce Holdings Plc, said recently that aviation as a whole “is built on setting fire to hydrocarbons” and needs to wean itself off that “quite quickly.” Bombardier Inc., owner of the Learjet brand, warned in its annual report that “the impact to us and our industry from legislation and increased regulation regarding climate change is likely to be adverse and could be significant.”The globe-trotting business elite and A-list celebrities who once made private jets such desirable status symbols certainly aren’t helping the industry’s image problem, with the media increasingly taking issue with those who preach the environmentalist faith while turning up at events in their Gulfstreams.The British royal Prince Harry has been dubbed the “Carbon Footprince” by his country’s press after taking several private flights to the Mediterranean this summer despite his outspokenness on ecological issues. It’s doubly ironic that one of those journeys was to Alphabet Inc.’s four-day climate change summit in Sicily, where an epic queue of private jets rather undermined the well-intended activism.You can see what the critics are getting at from a “do as I say, not what I do” perspective. Travelling by private jet produces several times more carbon dioxide than purchasing an economy seat on a commercial flight (precisely how much depends on how many people are on board and whether the jet flies home empty). The average American is responsible for about 16 tons of CO2 emissions per year. That’s already three times the global average, but it’s only a fraction of what private jets produce in a typical year.As such, the tax advantages for private jets are very hard to justify. Nor is it helpful that many operators will be exempt from the aviation industry’s commitment – known as Corsia – to cap net emissions at 2020 levels and to halve these by 2050.(1)Banning private jets, as some have suggested, wouldn’t do much to curb climate change as there are only about 20,000 of them operating today. The aviation industry accounts for about 2%-3% of global emissions and private jets perhaps pump out as little as 0.04% of the total, according to industry groups.But symbolism matters in the climate debate. If private jet users aren’t seen to be doing their bit, they can’t reasonably expect poorer folk to make sacrifices either. While the purchase of carbon offsets to make up for the impact is worthy and rational, intellectual justifications are a hard sell on this topic.Of course, private jets aren’t just frivolous toys, they have their uses too as a time-saving device for executives. As such, their users and makers will be eager to combat any burgeoning environmental backlash through the development of cleaner technologies. Carbon efficiency no doubt will become as important as time efficiency in selling planes.Startups such as Eviation, as well as incumbent manufacturers and suppliers, are already plowing money into hybrid and electric aircraft. The industry is also trying to encourage operators to use non-petroleum fuels, although they’re expensive and hard to get hold of. Because of the limited energy density of batteries, it’s probable that smaller aircraft will be the first to go electric. In the meantime, my guess is that rich folk will think twice before posting a shot of their plush planes on Instagram. The Swedes have a word for that too: smygflyga – “flying in secret.”  (1) Planes with a maximum takeoff weight of below 5700kg and operatorswith fewerthan 10,000 tonnes of annual carbon emissions are excluded. The private jet industry says it will pursue voluntarily the same goals anyway.To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at©2019 Bloomberg L.P.

  • GE Bondholders’ Fears Rekindled After Short Seller’s Report

    GE Bondholders’ Fears Rekindled After Short Seller’s Report

    (Bloomberg) -- A short-seller-funded report alleging accounting fraud at General Electric Co. has rekindled bondholders’ worst fears about the company, even if investors aren’t sure they buy the accusations.GE’s most actively traded bonds have been clobbered over the last week, weakening the most since early February, after financial examiner Harry Markopolos raised questions about the money the company has set aside to cover insurance losses, among other issues. If there’s no merit to these charges, as GE says, the company still has to fix its ailing operations, while global economic growth is showing signs of weakening.“The economy could have an outsized impact on a company that has yet to shore up its business plan. That’s where GE is,” said David Knutson, head of credit research for the Americas at Schroder Investment Management. “It still has a long way to go.”The bonds’ weakness signals that investors are growing a little more worried not just about profits -- often the biggest concerns in the equity markets -- but also about the company’s ability to pay its bills. Risk premiums on GE’s notes are still generally lower than on junk bonds, suggesting that investors’ growing fears are still limited.In late July, the company posted a 26% decline in operating earnings from its manufacturing units, and forecast free cash flow for the year which could be negative, although it did raise that projection from prior levels. As bond yields broadly fall, the company’s pension obligations could rise, forcing it to divert cash toward bulking up its retirement plans instead of paying off debt.That alone should give investors pause, even if there is no merit to the report from Markopolos, who was early to raise concerns about fraudster Bernie Madoff, said analysts at CreditSights. GE Chief Executive Officer Larry Culp swiftly dismissed Markopolos’s report as “market manipulation -- pure and simple.”“Although we have lots of qualms with Markopolos’ report, it does serve as a quasi wake-up call for investors,” the CreditSights analysts wrote in an Aug. 16 report. This year’s rally for GE debt “may have lulled the market into a false sense of security.”Rally FizzlesThat’s showing up in the company’s debt. Risk premiums, or the extra yield a bond pays compared to Treasuries, have been widening for GE’s notes. Those spreads for GE Capital International Funding’s 4.418% bonds due November 2035, GE’s most actively traded security of the last 50 days, rose to 2.25 percentage points on Wednesday, from about 2.04 percentage points a week earlier before the report came out. Corporate bond spreads generally edged narrower over that period. The spread widening on GE’s 2035 bonds was the worst relative to the size of the risk premium since the week ended Feb. 8.That weakness came after GE had been a bond market hero for much of the year. Spreads on the 2035 notes have narrowed significantly after starting 2019 at around 2.9 percentage points. GE notes offer higher yields than most other investment-grade securities, and the company has committed to paying down a chunk of its more than $108 billion of debt as it sells off assets.So far this year, GE has sold part of its stake in Wabtec Corp., a railroad manufacturing and services company, and its bio-pharma business, amounting to more than $20 billion of additional cash that can be used to pay down debt. The company ended the second quarter with just under $30 billion of cash total at its industrial and capital units.Downgrade Risk?Markopolos said that the company’s high BBB credit rating will be cut once additional reserves for its long-term care unit are properly accounted for. So far, none of the three major credit raters have taken any action. Moody’s Investors Service and S&P Global Ratings have maintained a stable outlook, while that of Fitch Ratings is negative. (Fitch said in a Tuesday report that GE’s long-term care insurance reserves are worse than average, but did not change its rating on the company.)Investors are trading the bonds as if they are at higher risk of being downgraded. The risk premium on an average BBB company bond is 1.52 percentage point, according to Bloomberg Barclays indexes. GE’s 5.55% bonds due 2026, which have a similar duration to the index, trade at a spread of around 2.11 percentage points, according to Trace.Raters may ultimately succumb to “exhaustion” from defending rankings that can’t be supported by fundamental results, which could prompt them to take further negative action, Bloomberg Intelligence analyst Joel Levington said in a report Tuesday. However, GE benefits from rater expectations that are well below its peers, so staying close to its deleveraging goals could amount to limited rating risks, Levington said in a separate report.GE is struggling to fix itself after having lost about half a trillion dollars in market value since peaking in 2000. In October, GE’s board ousted its chief executive officer and handed the reins to a turnaround expert: Larry Culp. Earlier this month the company said it’s in the middle of a “multiyear transformation.” It is trying to fix its power business while also showing signs of strain in its traditionally strong aviation unit.“There has been a lot of faith put into the management team, particularly Culp, to turn around the ship from the direction it was going,” said Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC. “The question is whether he’ll be successful.”(Updates with cash flow forecast in fifth paragraph and asset dispositions in 10th.)\--With assistance from Richard Clough.To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at, Dan Wilchins, Christopher DeRezaFor more articles like this, please visit us at©2019 Bloomberg L.P.

  • Dow Stock Is Cheap for Too Many Reasons

    Dow Stock Is Cheap for Too Many Reasons

    The short history of the new Dow (NYSE:DOW) stock has brought little more than declines. An initial spike after Dow again became a separate company has given away to four months of falling stock prices. Today, it sells near its lowest point since its reintroduction.Source: JHVEPhoto / The ongoing trade war with China explains much of the decline. However, the spinoff of the former DowDuPont into Dow, DuPont de Nemours (NYSE:DD) and Corteva (NYSE:CTVA) has left investors with a company structure few seem to understand. Until Dow can simplify the company and resume its previous flow of trade with China, DOW stock will likely continue its descent. DOW Stock Continues to DeclineA little more than a month ago, I turned bullish on DOW stock after having been a bear. While I saw possible headwinds related to the trade war, I figured the low price-to-earnings ratio and the generous dividend made a position in DOW worthwhile.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThen, earnings happened. A revenue miss sent it on a downward journey. The declines continued as two analysts downgraded DOW stock to a sell, both cite weakening global demand as the reason. Today, it trades in the $43 per share range, near its 52-week low. * 10 Undervalued Stocks With Breakout Potential From a certain point of view, this does not change my previous rationale for recommending DOW stock. The forward P/E ratio now stands at 9.6. Moreover, thanks to the lower stock price, the $2.80 per share annual dividend currently yields almost 6.5%. Dow's Problems Go Beyond the Trade WarHowever, other factors have since persuaded me otherwise. As InvestorPlace columnist Bret Kenwell states, free cash flow did not cover the cost of the DOW stock dividend. Furthermore, with the company just having separated itself from DuPont, investors have no dividend history where they can turn.Moreover, investors have struggled with the business model backing up Dow stock since it became separate. Our own Josh Enomoto goes so far as to compare DOW stock to General Electric (NYSE:GE) and 3M (NYSE:MMM). He points out its consumer, industrial and packaging categories as evidence that Dow has become a hodgepodge of different companies without a focused purpose. Between that and the lower revenue tied to the U.S.-China trade war, the selling continues in DOW.In fairness, DOW stock is not the only equity in this industry which has suffered. Peers such as Westlake Chemical (NYSE:WLK) and LyondellBasell Industries (NYSE:LYB) also have fallen to 52-week lows. Furthermore, one has to wonder when the market will finally consider the trade war priced into DOW stock and its peers?For now, DOW continues to fall. Even with a low P/E and a high dividend yield, investors rarely succeed by fighting the herd. Moreover, when it does come time to buy, investors must ponder whether they would prefer DOW stock or one of its peers. For example, LyondellBasell stock sells for only 5.8 times forward earnings. At about 5.8%, it pays a slightly lower but still impressive dividend yield. Also, this dividend has risen for seven straight years, and yes, the company cash flows cover this payout. The Bottom Line on DOW StockDOW stock needs both a cohesive focus and for China trade to begin moving higher. Dow stock has fallen since the company missed revenue for its second quarter. Even a low multiple and a generous dividend yield have not stemmed the decline.To some degree, DOW faces the same issues with China trade as its peers. As a result, these peers also have seen their stocks fall to 52-week lows. However, many investors and analysts struggle to understand how the company works since the spinoff. Moreover, with the lack of a dividend history, investors cannot know whether the payout will remain stable under current market conditions. The fact that it does not generate sufficient cash flows to cover this payout merely casts more doubts.Until investors know DOW stock has priced in trade war concerns, investors should stay away. Also, when it comes time for buyers to return to this industry, the case for buying DOW could appear weak. With LYB stock offering a lower valuation and a more stable dividend, investors may not buy Dow stock at that time either.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Dow Stock Is Cheap for Too Many Reasons appeared first on InvestorPlace.

  • CEOs Are Piling Into These 2 Value Stocks

    CEOs Are Piling Into These 2 Value Stocks

    One executive purchased $10 million in shares Continue reading...

  • General Electric investors are still terrified in the wake of Harry Markopolos' fraud claims
    Yahoo Finance

    General Electric investors are still terrified in the wake of Harry Markopolos' fraud claims

    GE's stock continues to be under pressure in the wake of Madoff whistleblower Harry Markopolos' fraud claims.

  • Ormat Arm Enters Agreement for McGinness Hills Phase 3 Plant

    Ormat Arm Enters Agreement for McGinness Hills Phase 3 Plant

    Ormat Technologies (ORA) continues to develop geothermal projects across the globe. One of its wholly-owned unit enters into an agreement with a private investor for the McGinness Hills Phase 3 Plant.

  • Corporations Can Shun Shareholders, But Not Profits

    Corporations Can Shun Shareholders, But Not Profits

    (Bloomberg Opinion) -- Jamie Dimon says he intends to move beyond the staid maxim that corporations should act to maximize shareholder value, and he has persuaded 180 of his fellow CEOs to join him. They propose a new ethos in which corporations such as JP Morgan Chase & Co. will be accountable to all stakeholders — including not only employees, customers and shareholders, but also society at large.It certainly sounds enlightened — and if Dimon’s goal is merely to sound enlightened and thereby improve JP Morgan’s image, then his move is a smart one. If, however, he genuinely means what he says, then his proposal is misguided. Its implementation will be at best wasteful and at worst harmful to investors, workers and society.The new approach, described in a deceptively modest one-page document called “Statement on the Purpose of a Corporation” issued by the Business Roundtable, comes across as a rejection of Milton Friedman’s famous dictum that the social responsibility of business is to increase profits. So it’s useful to check what the Nobel laureate in economics actually said.In his essay, published in 1970, Friedman made no mention of “shareholder value.” His lodestar was profits (or, in the case of a non-profit corporation, the provision of the public good as laid down in its charter). Corporate managers can and have boosted share prices by engaging in accounting chicanery, obscuring tail-risks, jawboning the financial press, gaming earnings estimates and, in general, making decisions that look good in the short term but mask longer-term problems.All of these, Friedman wrote, are explicit violations of management’s social responsibility because they involve deceit on the part of someone entrusted with the savings and livelihood of others. Even white lies are violations of social responsibility.As an example, consider General Electric Co. under the leadership of CEO Jack Welch. For almost 20 years, Welch massaged the company’s earnings reports by adjusting transfers from its highly profitable GE Capital division to the parent corporation. This made it appear as if GE was steadily increasing profits at a moderate pace, when in fact profits were swinging wildly from quarter to quarter. Shareholders liked the stability and predictability of GE’s earnings and made the company the most valuable in America. The press ate it up too, turning Welch into a mini-celebrity. Employers and customers benefited as well, as the stability meant that GE could avoid rash layoffs and price increases.It was society that suffered. Welch had created the impression that U.S. heavy industry still offered solid, predictable returns if only managers had the foresight to adopt the investments in technology and leadership philosophy that he promulgated. Not only was this untrue, but pretending it was true encouraged false hope and complacency just as competition from China was challenging American manufacturing.Friedman understood that the competitive market was a better aggregator of knowledge about ideal investments, management strategies and the overall future of the economy than any single CEO could ever be. But that aggregation can only occur when market participants have accurate information on which to base prices.To his credit, Dimon — who is chairman of the Business Roundtable — has pushed back against the excessive focus on share prices at the expense of long-term profits. To the extent that he is now simply doubling down on that philosophy, his current project is both healthy and consistent with Friedman’s admonishments.But Dimon seems to have something a bit more expansive in mind. In the annual shareholder letter he published in April, he lists several chronic social ills, including an ineffective education system, a dramatic decline in labor force participation and poor federal budgeting. His diagnosis is plausible and maybe even correct. But there is no reason to believe he (or most other CEOs) has special insight into matters outside his business.In public education, for example, Dimon laments how poor inner-city schools set children up for a life of poverty. “We know what to do,” Dimon writes, and proceeds to outline an agenda of increasing vocational education and including local businesses in curriculum design. In fact, research on vocational education shows mixed results, helping students who specialize in advanced coursework in a single concentration but making it harder for them to adapt to changes in the labor market.The purpose of all this is not to criticize Dimon, whose concern appears authentic. It is only to observe that holistic thinking about economic and social systems is intuitively counter to the type of thinking often needed to excel in business. Understanding this surprising and complex divergence between market incentives and overall economic outcomes has been at the heart of economics ever since Adam Smith identified it as “the invisible hand.”Asking corporate managers to focus more on improving society and less on making profits may sound like a good strategy. But it’s a blueprint for ineffective and counterproductive public policy on the one hand, and blame-shifting and lack of accountability on the other. This is a truth Milton Friedman recognized nearly five decades ago — and one that all corporate stakeholders ignore today at their peril.To contact the author of this story: Karl W. Smith at ksmith602@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.For more articles like this, please visit us at©2019 Bloomberg L.P.

  • Motley Fool

    General Electric Is Under Attack: What Investors Should Know

    A well-known whistleblower just called GE a fraud. Is he right?

  • Disney Slips 0.12% on Allegations of Inflated Revenue
    Market Realist

    Disney Slips 0.12% on Allegations of Inflated Revenue

    A former employee claims that Disney (DIS) inflates its revenue to enhance its financial results. Disney refutes the allegations.


    Strategic Value Investing: Dividend Discount Models

    This basic valuation model can determine the success or failure of value investors Continue reading...

  • Reuters

    UPDATE 2-New York sues EPA over GE's Hudson River PCB cleanup

    New York sued the U.S. Environmental Protection Agency on Wednesday, accusing the agency of prematurely allowing General Electric Co to stop clearing the Hudson River of PCB contamination before the cleanup was finished. Citing the state's compelling interest in protecting the public and the environment from contaminants, New York officials are seeking to void GE's "certificate of completion" from the EPA on April 11, which excused the company from further dredging unless further studies showed more was needed. New York Governor Andrew Cuomo and Attorney General Letitia James, both Democrats, accused Republican President Donald Trump's administration of siding with "big polluters" by accepting PCB levels that constitute a known health risk and leave Hudson River fish "too toxic" to eat.


    Berkshire Hathaway Is Not an Investment Fund

    It’s actually one of the world’s biggest insurance companies Continue reading...


    [video]New York Sues EPA, Disputing Claim That GE Completed Hudson River Cleanup

    The NYS Department of Environmental Conservation says the cleanup of the PCBs GE dumped in the New York river isn't complete.


    Forget GE’s Accounting for a Minute. GE Power Is on a ‘Positive Trajectory.’

    Despite what the flurry of recent headlines suggests, there are other things going on at General Electric for investors to consider besides accounting assumptions for long-term care insurance. The company’s power business, for one.

  • Wednesday’s Vital Data: Target, General Electric and Apple

    Wednesday’s Vital Data: Target, General Electric and Apple

    U.S. stock futures are rebounding nicely on robust earnings reports from Lowes (NYSE:LOW) and Target (NYSE:TGT).Source: Shutterstock Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.77%, and S&P 500 futures are higher by 0.84%. Nasdaq-100 futures have added 0.86%.In the options pits, calm has returned, and the overall volume is sinking like a stone. Calls outpaced puts despite the down day with about 14.4 million calls versus 13.1 million puts changing hands on the session.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, over at the CBOE, the single-session equity put/call volume ratio rallied back to 0.69, landing it in the center of its recent range. Remember, extremes in this reading are the actionable signals. When it's fiddling in the middle, it signals business as usual. The 10-day moving average continues to unwind its rally falling to 0.73.Options activity was buzzing in Target, General Electric (NYSE:GE) and Apple (NASDAQ:AAPL) yesterday.Let's take a closer look: Target (TGT)Inverted yield curves and deteriorating economic data have hampered stocks for weeks now. If you've wondered how retailers like Target have fared with all the potential headwinds, then wonder no longer. They're smashing it. This morning Target reported second-quarter earnings numbers that surpassed the Street's expectations. * The 10 Best Marijuana Stocks to Buy Now Buyers are swarming, sending TGT stock up 17% to $100. Let's look at the key metrics behind the morning's ramp to record highs. For the quarter, the company earned $1.82 per share on sales of $18.42 billion. Analysts were forecasting $1.62 EPS on $18.34 billion revenue. Same-store sales also blew through forecasts, rising by 3.4% versus expectations for 2.9%.The posture of Target's price chart was holding steady ahead of this morning's report. The powerful gap places an exclamation point on the uptrend and should set a bullish tone for the coming quarter.Earnings anticipation lit a fire under options trading. Total activity screamed to 696% of the average daily volume, with 179,908 contracts traded. Calls contributed 62% to the tally.Implied volatility was running hot at 40% ahead of this morning's report. That places it at the 77th percentile of its one-year range. Premiums were pricing in a gap of $5.36 or 6.3%, so today's 17% pole vault blew the doors off of expectations and will deliver massive profits to any traders holding long volatility trades like straddle into the number. General Electric (GE)This year's recovery in General Electric shares all but unraveled over the past two weeks, and yesterday's 3% whack shows sellers still dominate the landscape. The big news that continues to hand over the head of GE stock is last week's bearish research piece by Harry Markopolos' calling GE "a bigger fraud than Enron."Although GE did bounce back strongly after the one-day, 11% plunge, the recovery stopped short of healing all the damage, and we've since seen shares rollover. The $9 zone was a huge support zone throughout the year and now looms overhead as significant resistance. It is the spot where sellers emerged to thwart the rebound and signals we're now in a sell-the-rally environment.The sentiment is souring, the fundamentals are weak, and the technical picture looks terrible. If ever there was a toxic brew for lower prices, this is it.On the options trading front, puts outpaced calls by a modest margin. Activity crept higher to 119% of the average daily volume, with 324,254 total contracts traded. Puts added 59% to the session's sum.Implied volatility ticked up to 53% landing it at the 49th percentile of its one-year range. Premiums are baking in daily moves of 28 cents or 3.3%. Apple (AAPL)Last month's earnings report introduced volatility to Apple shares, and the outsized swings continue to this day. Fortunately, the past two weeks of gains have returned AAPL stock to the scene of its earnings gap. Sellers aren't ceding ground without a fight, however. The last two sessions have seen intraday bearish reversals creating a pair of topping tails that reflect a battle at resistance. * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio This morning's 1% gap higher will test sellers' resolve once more. But with the 50-day and 20-day moving averages both pointing higher, I suspect it's only a matter of time before we visit the next resistance zone at $220.Even though the news was light for AAPL yesterday, the options trading was high enough to land Apple on the leaderboard. Traders favored calls over puts despite the late-day selloff. Total activity only added to 77% of the average daily volume, with 426,467 contracts traded. 61% of the trading came from call options.Implied volatility inched higher on the day to 28%, pushing it to the 31st percentile of its one-year range. Premiums are now pricing in daily moves of $3.76 or 1.8%, so plan accordingly.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Wednesday's Vital Data: Target, General Electric and Apple appeared first on InvestorPlace.

  • Now Isn’t the Time to Invest in General Electric Stock

    Now Isn’t the Time to Invest in General Electric Stock

    General Electric (NASDAQ:GE) has been on a bumpy ride over the past week. Last Thursday, the company's shares had their worst day since the 2008 financial crisis hit. General Electric stock fell 11% after forensic accountant Harry Markopolos released a 175-page report accusing the company of accounting fraud.Source: JPstock / However, on Friday, GE stock rebounded slightly after management defended its accounting practices in a series of statements. Plus, CEO Larry Culp bought $2 million of the equity. This action went a long way to soothe investors that were rattled by the allegations.But this is just the latest in a series of missteps that has impacted the GE stock price. The hype over the Markopolos report may pass. However, the company still has serious problems it needs to address going forward.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Details on the Report from MarkopolosHarry Markopolos is best-known for accurately spotting the Bernie Madoff Ponzi scheme. In his report, Markopolos said General Electric is hiding serious financial problems that will cause it to go bankrupt. * 10 Undervalued Stocks With Breakout Potential Specifically, GE understated liabilities in its insurance business and misrepresented its financial dealings. Its accounting fraud is "bigger than Enron and WorldCom combined."If it sounds sensational and over the top, that's because it is. The Markopolos report is short on any real evidence and full of inaccuracies. Analysts from Goldman Sachs, Citigroup, and William Blair have all criticized the report.Plus, Markopolos is part of a hedge fund that stands to benefit financially from a declining GE stock price. This immediately hinders his credibility. But regardless of what happens with the report, it seems unlikely that General Electric stock is turning around anytime soon. Reasons to Hold Off on General Electric StockIn spite of the company's restructuring efforts, General Electric stock is down nearly 30% from a year earlier. It's also down 85% from its all-time high in 2001. One of the biggest problems GE needs to contend with is its heavy debt load.The company is carrying more than $100 billion in debt and is running out of ways to reduce this figure. It already sold off its energy services, part of its healthcare business, and other assets. Not to mention, the company hasn't earned any net income over the past couple years. Further, its free cash flow has been negative for a long time now.A number of analysts have defended the company, and many point to their faith in CEO Larry Culp as the reason why. And it's true that Culp has done a lot to turn General Electric around. But these problems are bigger than any one CEO.The company may not be guilty of fraud. But right now, it isn't worth investing in either. If a General Electric turnaround is ever going to happen, it's going to take a long time. And the company's shareholders will be negatively affected in the meantime. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Now Isna€™t the Time to Invest in General Electric Stock appeared first on InvestorPlace.

  • Maximizing shareholder value can no longer be a company’s main purpose: top CEOs

    Maximizing shareholder value can no longer be a company’s main purpose: top CEOs

    The heads of nearly 200 U.S. companies said Monday they are committing to a move away from the idea that the main purpose of a company is to maximize shareholder value, marking a break with a long-held conviction.

  • Whether or Not You Believe the Fraud Allegations, Avoid GE Stock

    Whether or Not You Believe the Fraud Allegations, Avoid GE Stock

    Things have not been great for General Electric (NYSE:GE) and a negative report by Harry Markopolos was the last thing GE stock needed.Source: JPstock / When I last wrote on GE, I had opined that investors should remain on the sidelines. I also opined that GE should spin-off its aviation segment to create further value.I maintain my "remain on sidelines" view on GE stock even after a sharp decline of 20% in August, recent developments only have solidified my position.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Harry Markopolos Versus General ElectricMarkopolos is a well-known whistleblower related to exposing Bernie Madoff's Ponzi scheme.In a detailed report, Markopolos claimed that GE is under-reporting $38 billion in losses. That's a big accusation considering the company's current market capitalization of $77 billion. * 10 Undervalued Stocks With Breakout Potential However, GE was quick to respond to the allegations with the company calling them "meritless." In an interview with CNBC, Leslie Seidman, an independent director, commented that the claims were "misleading, inaccurate and inflammatory."It is worth noting that Leslie was a former chairman of financial accounting standards and according to her view, the report by Markopolos is "full of opinions."However, there is an important point mentioned by Leslie in the interview that backs my view of staying on the sidelines.GE will go through an annual loss recognition test in the third quarter. Further, GE will also complete the annual statutory cash flow testing in the first quarter of 2020. According to GE press release -It is the statutory cash flow testing, not GAAP accounting, that determines the funding requirements for all insurance companies.I believe that the market will wait for liquidity cues from these tests and the stock can potentially remain sideways. Further clarity on the liquidity position or additional liquidation requirement for LTC insurance can dictate the stock direction.Additionally, GE has planned to monetize assets and the markets will wait for announcement on that front for additional liquidity cushion.Therefore, even if the claims by Mr. Markopolos are baseless, General Electric stock is unlikely to witness any bullish momentum as markets are in a "wait and watch" mode. Economic Headwinds Will Keep GE Stock DepressedThe Federal Reserve has already cut interest rates for the first time since the end of 2015. This is clearly an indication of the fact that economic growth is decelerating.There is a fear that a possible recession will be "long than deep." If this holds true, General Electric is likely to face challenging times.It is also a matter of concern from the perspective of asset monetization. With General Electric looking to ramp-up cash position, a slowdown or recession will make asset sale challenging.To add to the woes, General Electric CEO has already stated in March that free cash flow from the industrial and power unit will remain negative in 2019. Even if this factor is already discounted in the stock, it is a strong reason to avoid GE.Moreover, the power segment is unlikely to see positive free cash flows for the coming years and offsets potential positives from other segments. This is another reason why it makes sense to spin-off robust cash flow divisions to unlock shareholder value.Spin-offs will also make room for detailed reporting of segment or business segments. This is something investors will be looking for, amidst fraud allegations. Final Words on GE StockGeneral Electric still has a long road ahead in terms of restructuring, asset sale and deleveraging. Economic headwinds will make the path challenging and possibly delay asset monetization. Further, the power business remains a drag and impacts the consolidated free cash flows.The coming quarters will be important as GE releases the awaited reports on the annual loss recognition test and annual statutory cash flow testing.Overall, GE stock has a mountain to climb and I expect sideways movement amidst volatility than any sharp upside in the coming quarters.In-sync with this view, investors should stay on the sidelines and wait for further clarity on the liquidity profile and business restructuring developments.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Whether or Not You Believe the Fraud Allegations, Avoid GE Stock appeared first on InvestorPlace.

  • Motley Fool

    General Electric Under Attack and the Latest Fed Worries

    Here’s what investors should know about GE’s latest drama and Fed Chair Powell’s anticipated commentary.

  • Reuters

    UPDATE 3-State Dept approves possible $8 bln fighter jet sale to Taiwan -Pentagon

    The U.S. State Department has approved a possible $8 billion sale of F-16 fighter jets to Taiwan, the Defense Security Cooperation Agency said on Tuesday in an official notification to Congress. The potential deal is for 66 aircraft, 75 General Electric Co engines, as well as other systems, the agency said in a statement, adding it served the interests of the United States and would help Taiwan maintain a credible defense. China has already denounced the widely discussed sale, one of the biggest yet by the United States to Taiwan, which Beijing considers a wayward province.

  • GE: Uncertainty Remains a Huge Concern
    Motley Fool

    GE: Uncertainty Remains a Huge Concern

    General Electric shows, again, why it is not for the faint of heart.