|Day's Range||0.2000 - 0.2000|
GE Aviation and and its CFM joint venture won a record $55 billion in new orders and commitments at the Paris Air Show, topping Boeing and Airbus. GE rose, along with Boeing and Airbus.
How many steps does it take to reset a GE smart bulb? Apparently, 12 to 14. Creating a step-by-step video illuminating GE (GE) customers on how to do a factory reset on their C by GE bulbs probably seemed like a bright idea at the time.
Shares of General Electric Co. surged Thursday, putting them on track for a technical breakout that confirms a bullish technical setup, after the industrial conglomerate said its aviation unit announced record orders at the Paris Air Show this week.
(Bloomberg Opinion) -- Aviation has long been considered General Electric Co.’s crown jewel, but with the company’s free cash flow turning negative this year, “crown jewel” is a relative term and the business is coming under increasing scrutiny. Some of it is deserved; some isn’t.GE Aviation CEO David Joyce seemed to be on a mission at this year’s Paris Air Show to prove his division’s worth. He arrived armed with more financial detail than GE had ever previously provided for the business, came out swinging against suggestions he was sacrificing price to score revenue wins, and announced some notable orders. And yet questions remain about what the business’s true financial profile would be if it was reconstituted as a stand-alone company and cut off from the tax and working-capital benefits that have historically come with being part of the mother ship. That matters, because many investors continue to value GE based on the sum of its parts, the argument being that the aviation unit alone can offset trouble spots in GE’s power, renewables and long-term care insurance operations and support a higher valuation for the stock.First, the positives: GE Aviation and its CFM International engine joint venture with Safran SA booked $55 billion in orders for engines and services at the Air Show, exceeding the $35 billion target Joyce laid out at a media briefing at the start of this week.(2) Like most order tallies from the event, not all of that is technically new business. The number includes an order from AirAsia that had initially been announced in 2016 and entails 200 of GE’s LEAP engines. The purchase was finalized at this year’s event and AirAsia also expanded a servicing agreement, bringing the total value of the deal to $23.1 billion before customary discounts. But there was also a significant new win: Indian budget carrier IndiGo agreed to a $20 billion order for Leap engines, spares and overhaul support.The deal is a blow to United Technologies Corp.’s Pratt & Whitney arm, which had been the sole provider of engines for IndiGo’s Airbus SE A320neo jets. As with Boeing Co.’s face-saving win of an order for its embattled 737 Max jet, some analysts have wondered what GE had to give up in order to convince IndiGo to abandon Pratt. They were encouraged in this thinking by comments from Pratt President Bob Leduc, who said “GE was willing to be more aggressive than we were” on pricing. That may just be Leduc talking his book, though.(4) Unlike in the depressed gas turbine market, where every revenue win likely comes at a cost to GE’s margins, GE shouldn’t need to sacrifice profit to chase market share in aviation – both in general and in the case of this particular deal. Pratt’s GTF engine has had a series of glitches that ultimately proved fixable and relatively minor, but as one of the largest buyers, IndiGo has borne the brunt of the fallout, including in-flight engine shutdowns and grounded planes. Earlier this year, India mandated weekly inspections of certain engine parts and restricted some operations for Airbus planes powered by the GTF. GE has engine headaches of its own. Boeing’s CFO Greg Smith put GE on the hot seat earlier this month, saying its GE9X engine was holding up the aerospace giant’s new 777X plane. At a media briefing this week, Joyce said GE discovered a part of the engine was showing more wear than anticipated and because of the extensive testing required to prove it had fixed the issue, the 777X’s first flight likely won’t happen until the fall. Investors are understandably jittery over any product setbacks after the uncovering of durability issues with GE’s flagship H-class gas turbine. But given the GTF’s history of bugs, I find it hard to fault GE for making tweaks to its engine. In the wake of the voluminous criticism directed at Boeing and the FAA for not realizing the potential impact of a software system linked to the Max’s two fatal crashes, rigorous testing – before the planes start flying – would seem to be in everyone’s best interest.GE has argued it has a technology advantage that will continue to give it an edge even as United Technologies increases its R&D budget through a blockbuster merger with defense contractor Raytheon Co. That remains to be seen, and I don’t think GE’s order wins at the Air Show tilt the scale one way or another. A smart R&D budget is worth more than a big one, but United Technologies will have a lot of money to work with and that will make it difficult for GE and others to stand pat. GE Aviation’s ability to respond to that competition ultimately boils down to how much cash flow it generates – and that’s where confusion continues to reign supreme. At Tuesday’s analyst event, Joyce laid out the various inputs behind the unit’s reported $4.2 billion in free cash flow last year. It was a sign the company is taking investors’ demands for more transparency seriously, although it remains disappointing that these disclosures come in fits and starts. There were some positive takeaways: Citigroup Inc. analyst Andrew Kaplowitz noted the improvement in inventory turns in 2018 even as GE ramped up production of the Leap. But one sticking point was the allocation of corporate costs including pension, interest and taxes, with JPMorgan Chase & Co. analyst Steve Tusa and Gordon Haskett’s John Inch debating whether the unit was carrying its fair share.On the subject of taxes, GE didn't do itself any favors as far as illuminating what's really happening in the aviation unit. The presentation included a line that indicated taxes and other operating expenses deducted $100 million from the aviation unit’s cash flow, which seems quite low on the face of it. But the aviation unit actually pays more than that in taxes. And GE isn't hiding that burden from its calculation of the free cash flow. You just have to know where to look for it.The starting point for GE’s explanation of how it calculated the aviation unit’s free cash flow – $5.8 billion in net earnings after adjusting for depreciation and amortization – had already been adjusted for taxes accrued, based on its operations, according to a company representative. GE confirmed the aviation unit pays a tax rate in the low 20% range that CFO Jamie Miller has guided to for the entire company. The $100 million number for taxes and other operating expenses in the Air Show presentation is something different. That is the difference between taxes paid and accruals in 2018. Are you still with me?The fact that this is all so confusing underscores one of the issues I’ve had with GE’s efforts to be more transparent. Disclosures come in fitfully and often leave people with only more questions. I don’t think GE always does this on purpose; it’s partly a reflection of the fact that this remains an incredibly complex company and any given number is going to require a half-hour explanation. But you can’t have it both ways. Is GE Aviation a crown jewel? Yes. Is GE very good at explaining that? It could use some work in that department. (1) The total doesn't include engines for the 200 737 Max jets that British Airways owner IAG SA ordered at the Air Show. CFM is the sole engine provider for that plane.The list price for those engines is $5.8 billion.(2) The flip side of Leduc's comments was Rolls-Royce Holdings Plc CEO Warren East's description of GE as a "very savvy commercial operator."To contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The U.S. Senate on Thursday voted to block the sale of billions of dollars in military sales to Saudi Arabia, the United Arab Emirates and other countries, rejecting President Donald Trump's decision to sidestep Congress' review of such deals by declaring an emergency over Iran. Trump has promised to veto the Senate action in order to proceed with the deals, worth some $8.1 billion. Senators would need 67 votes to override his veto, which looked unlikely after Thursday's votes.
Currently, long-embattled industrial giant General Electric (NYSE:GE) is an enigma. Indeed, I'd say it's a perfect enigma. Since this January's opening price, GE stock has performed admirably, gaining over 44%. That's a very solid return, especially considering the horrific losses the company has endured over the past few years.Source: Shutterstock On the other hand, General Electric stock really hasn't moved much since early February. For instance, on the Feb. 5 session, shares closed at $10.21. At the time of writing, GE finished a mildly disappointing midweek session at $10.34. To save you the calculating time, that's a pedestrian gain of 1.3%.Naturally, investors seek clues as to where GE stock will go next. Bullish speculators have a compelling case that the worst is behind the company. Management has secured substantive deals that make shares attractive, especially at this price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Value Stocks to Buy for the Second Half But the bears also have their counterpoints; namely, that General Electric stock has much to prove. After significant divestments designed to keep the organization afloat, GE has succeeded. But without some of its previous assets, it's hard to imagine a realistic turnaround story.Anytime you talk about GE stock, it's never an easy discussion. Nevertheless, here are three pros and three cons to consider: Pros: Wheeling and Dealing Should Lift GE StockSeveral analysts argue that General Electric stock is a "show me" investment. Simply, this means that GE will receive minimal, if any benefit of the doubt. Some companies can ride high on an interesting narrative. In contrast, General Electric must deliver the goods.It's a bit early to make strong pronouncements but they're doing exactly that. At the world-renowned Paris Air Show, General Electric secured $50 billion of orders for its highly demanded engines. This includes two big contracts: one with Indigo Airlines for $20 billion and another with Air Asia for $23 billion.It's a sizable leap from GE's deals from the 2017 edition, where the company booked $31 billion in orders. Pros: Aviation Has No Imminent Disruption ThreatAs I pointed out last month, aviation is a bright spot for GE stock. Therefore, it's no surprise that the company inked some deals.Better yet, I expect this trend to continue. Along with its highly respected expertise in this sector, another factor bolstering GE is the airline industry itself. It has moved from emphasizing large jumbo jets to smaller, fuel-efficient airplanes. That allows management to compete on volume.And speaking about show me, how about the Amazon (NASDAQ:AMZN) deal? GE's aircraft-lending unit will lend Amazon 15 Boeing (NYSE:BA) 737-800 freighters. Of course, AMZN intends to control more of its supply chain, which potentially jump-starts General Electric stock longer term.I also think it's very noteworthy that Amazon is working with GE in the first place. The e-commerce giant is a massive disruptor, and it has many options. Yet it went with the embattled organization, which is something to consider. Pros: General Electric Stock Needs "Power"One of the main criticisms against GE stock is that the underlying company is still holding onto its irrelevant legacy businesses. Arguably, the Power division represents a serious risk on paper. That's because the world is supposedly moving to clean-energy sources at a brisk pace.But let me drop a truth-bomb: the global economy is the entity that's decisively rising at a brisk pace. And growing economies require energy, lots of it. Sure, clean-energy plants can meet some of the demand. But the appetite would likely be so voracious that the world cannot depend on any one platform.That brings us back to the Power division. It might not look like it now, but once we get over some of the political overhangs regarding "non-clean" energy sources, General Electric stock could take off. Cons: Aviation Isn't Without HeadwindsOverall, I believe aviation will turn out to be a net positive for GE stock. However, I must point out some turbulence that directly impacts GE's recent bullish news.According to the International Air Transport Association, cargo-tonnage growth slowed to a worrying pace near the end of 2018. This data came out before the current round of retaliatory tariffs between the U.S. and China.If the trade war continues, retailers including vaunted Amazon will surely feel the pain. Ultimately, that detracts from the bull case for General Electric stock. Moreover, tensions between the top-two world economies could hurt consumer sentiment. That bearishness may trickle down to the airliner industry, which also hurts the company. Cons: GE Is Swimming in DebtThe above is a fairly granular argument. But with General Electric, bears don't need to scrounge for details. Instead, they can just pick out some broad financial metrics.One of those is debt. General Electric is swimming in it. From the most recent read, the organization is holding nearly $92 billion in this liability. * 6 Stocks Ready to Bounce on a Trade Deal Of course, debt isn't the end-all, be-all for assessing a stock. However, GE must stage an almost-unprecedented turnaround to make itself attractive again. Anything less and the once-iconic industrial giant will fall decisively into penny stock territory.Unfortunately, for management to generate positive traction will require investments. Again, with that "show me" environment, the markets don't have any patience. Cons: Management Must Overcome an Indefinite Credibility CrisisSuppose General Electric produces an outstanding earnings result for its second-quarter report: how will that move GE stock?On the surface, you'd expect shares to fly for a few sessions. For one thing, General Electric stock benefits from the law of small numbers. A second factor is that a positive earnings result plays into human psychology: investors will get excited about playing a turnaround story early in the game.But then reality will hit. Not too long ago, GE stock traded for around $30. Eventually, the markets may fade the company because after all, it's just one quarter.How many quarters must GE string together before it earns back its credibility? It might be a long list, which is why most investors are apprehensive. Conclusion: A Risky But Compelling OpportunityUnsurprisingly, GE stock has been rangebound the last few months. The company offers a compelling case for a revival. At the same time, it's impossible to forget GE's catastrophic losses.But because General Electric stock is rangebound, I believe the bad news is baked in. It's still crazy risky, but I definitely see a case for a speculative gamble. Just don't go in with money you can't afford to lose.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post 3 Pros, 3 Cons for Buying General Electric Stock Right Now appeared first on InvestorPlace.
What a difference strong leadership can make for a company, as shown by General Electric (NYSE:GE) stock. Larry Culp, who came on board as CEO in October 2018, had the unenviable task of leading the company's turnaround.But his moves has been decisive and strategic. More importantly, he has brought realism to the company. Then again, Culp demonstrated those abilities while he was the CEO of Danaher (NYSE:DHR), which generated standout results for shareholders during his tenure. * 6 Stocks Ready to Bounce on a Trade Deal Source: Shutterstock GE stock has done great during Culp's brief time with the company. Since December, the shares have gained 55%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut turnarounds often take a long time. And that will certainly be the case with GE's efforts. There is still lots of heavy lifting to be done, and GE is facing some tough headwinds. In other words, investors should be cautious, as the easy gains of GE stock may be over.In fact, there are already signs of that. Keep in mind that GE stock has been in a persistent range of $9 to $11 since February.So what issues is GE facing? Let's take a look at three risks of investing in General Electric stock. Risk Facing GE Stock: GE's FinancialsOne of the biggest changes at GE has been Culp's transparency with Wall Street. To this end, he says that 2019 will be a "reset" year. But the fact is that GE has a tremendous amount of debt and contingent liabilities. Cumulatively, GE owes a staggering $107.5 billion. So for quite some time, Culp will be mostly focused on finding ways to generate cash. To help accomplish that goal, he's already agreed to sell GE's biopharma business to Danaher and divest its locomotive segment, which was acquired by WabTec (NYSE:WAB).But given that GE is cyclical and that the global economy appears to be slowing, GE could easily report negative earnings surprises in the months ahead. Risk Facing GE Stock: GE's Aviation BusinessThe aviation business has been positive for General Electric stock for some time. As seen at this week's Paris Air Show, the unit is snagging plenty of orders. Note that it recently signed its biggest deal ever, agreeing to sell $20 billion of engines to an India-based airline.But unfortunately, the aviation business is still facing headwinds. For example, Boeing's (NYSE:BA) 777X widebody jet will not meet its deadline because of a problem caused by GE's engines. The problem is likely temporary, but it's still worrisome and will cause a meaningful amount of GE's revenue to be delayed.It's far from clear what will happen with the 737 MAX, which has been grounded because of two crashes. But again, this means loss of momentum for GE's engine business. Risk Facing GE Stock: GE's Power BusinessThe Power Business, which accounts for roughly 20% of GE's overall revenues, continues to be a problem for the company. The competitive environment of the sector is intense, demand for Power's products has been sluggish for some time, and it's been accused of being less than 100% forthright about its results. There are also signs that Chinese companies may make inroads in this industry.Here's what JPMorgan analyst Stephen Tusa has said about the situation: "We believe a full accounting of the situation with a closer look at the data, even a rudimentary review, supports our view that GE is indeed losing market share…"Keep in mind that Tusa was able to predict the implosion of GE stock. Consider that he currently has a $5 price target on the shares, implying a drop of more than 50% from their current levels.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post 3 Reasons GE Stock May Stall Out appeared first on InvestorPlace.
On June 20, GE Aviation published a press release stating that the company and CFM International had bagged $55 billion worth of new orders at the Paris Air Show—and with three more days to go before the closure of the show, there could be further additions to its orderbook.
As the Trump administration puts tariffs on a range of imported goods and pushes a replacement deal for Nafta, lobbying on trade-related issues could set a new record this year.
According to Investor's Business Daily, Aurora Cannabis (NYSE:ACB) is the most widely held equity on Robinhood. That's the commission-free trading platform popular with millennials and Gen Z-ers.Source: Shutterstock So, does the fact that millennials and Gen Z-ers are bullish on ACB stock make it a buy?Here are arguments for and against this theory.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Millennial Ownership of ACB Stock Is a Big DealNo question, younger investors are going to be more open to investing in cannabis stocks. They're more familiar with the product itself and aren't nearly as concerned about the stereotypes surrounding its use.For example, the average age of Robinhood's six million users is 32, smack dab in the middle of the millennial generation. Specifically, this demographic includes those born between 1981 and 1996. * 7 Value Stocks to Buy for the Second Half Perhaps that's one reason why four of the top 20 stocks held by Robinhood users are cannabis stocks. The others are Cronos Group (NASDAQ:CRON), Canopy Growth (NYSE:CGC) and Hexo (NYSEAMERICAN:HEXO), ranked number six, 11, and 14, respectively.Interestingly, the latter three on Robinhood's list are my favorites. However, Aurora stock has piqued my curiosity recently.InvestorPlace feature writer James Brumley recently wrote a piece about ACB stock that highlighted the moves the company's making to diversify its holdings beyond Canada. Take for example its purchase of Uruguay-based ICC Labs in November.Aurora paid $290 million for the company which controls 70% of the Uruguayan recreational market. The deal also gives ACB access to other countries in Latin America. The longer-term potential there for Aurora Cannabis stock is readily apparent. With a combined population of more than 650 million, this is a very lucrative market.As Brumley wrote, the purchase of ICC Labs gives Aurora a platform for growth in Latin America.Millennials recognize Aurora's big-picture view of the cannabis industry. In their view, management's carefully selected bets on regions and companies enhances the profile of Aurora stock.At the end of the day, millennials understand pot, they aren't scared of it, and the growth potential they see excites them.For Aurora to be at the head of the class is excellent news for owners of ACB stock. Youthful Exuberance for Aurora Stock Is Also a RiskHere's the big problem with Aurora sitting on pole position for Robinhood's list: millennials may view the volatility of ACB stock and cannabis investments in general as a pathway to quick riches. You can't necessarily blame them, as the sector tends to move wildly on the smallest of news.Fortune recently reported on the millennials use of Robinhood. Not all of it was good.Financial planner Tara Falcone, founder of financial-wellness program provider ReisUP, suggested several reasons why Robinhood clients might be high on Aurora Cannabis stock and its ilk:"When you're talking about first getting into trades, you click on browse [on Robinhood] and one of the first things you see is the 100 most popular list," Falcone told Fortune. "To the untrained investor who has now decided to start buying individual stocks, thinking 'I haven't done any research on my own, what are other people investing in?'"The fact that Aurora Cannabis stock appears at the top of the list suggests a seal of approval. But as Falcone points out, that's not always the case.If you take another look at the list, you'll see that General Electric (NYSE:GE) and Ford (NYSE:F) are number two and three on Robinhood's list.Wall Street professionals would not consider these two as strong buys. The Bottom LineAs every day passes, I get more enthusiastic about Aurora stock. While I'm not entirely sold on its overall business, I appreciate its efforts to become a global player. This is a strategy that's right in line with Canopy Growth and some of the other large Canadian cannabis companies.And despite the negatives, at the end of the day, the fact that Robinhood users love ACB stock is further confirmation Aurora's making all the right moves.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Robinhood's Users Love Aurora Stock: Should You? appeared first on InvestorPlace.
The $50 billion in new deals broke records for total engines and total value, and they were all secured this week at the Paris Air Show.
At the Paris Air Show this week, all eyes in the aviation industry are watching how recent turmoil will impact order performance. The past few years have been stellar for the industry, but may be about to change.
Citigroup said General Electric's core aviation unit is leading GE's transformation on the back of its stability and underlying growth.
Micron (NASDAQ:MU) is playing a game most investors won't be willing to concede. Indeed, it's a game most investors don't even know they're playing. But betting on MU stock isn't a value-minded play. It's not even a bet on rebounding DRAM prices. It's a bet on how other investors are going to perceive Micron's prospects at some point in the foreseeable future.Source: Shutterstock And that's a very tricky game to play.It was almost starting to make sense right before two curve balls were thrown.The first curve ball is, of course, a trade war that took dead aim at China's consumer-tech outfit Huawei, which by itself accounts for -- or accounted for -- 13% of Micron's revenue. The other curve ball is the advent of China's new DRAM maker Changxin Memory, which should be able to scoop up from Chinese business from MicronInvestorPlace - Stock Market News, Stock Advice & Trading TipsLargely lost in the discussion is the fact that MU stock is now trading at what can only be described as a stupidly low trailing P/E of 3.1. The forward-looking P/E of 8 makes it more than twice as expensive into its most plausible future, though that's still dirt cheap.According to Bank of America Merrill Lynch that valuation says the worst-case scenario is more than priced in. TheStreet's Tiernan Ray agrees, adding a psychological element to the matter:"With no remedy to DRAM's woes this year, it certainly seems the bears have been given just about everything they could hope for in terms of bad news. That may mean a pick-up in shares as the market discounts better times in 2020." * 7 Value Stocks to Buy for the Second Half It seems counterintuitive, at first, and perhaps it is. It'sa perfect synopsis of the headache at hand. The cyclical bottom for DRAM prices and the cyclical bottom in bearish sentiment surrounding MU stock aren't even close to being synchronized.The added trouble is, nobody truly knows how close we are to either bottom. It's entirely possible both are behind us. MU Stock Investors Have Selective VisionIt's not as if investors haven't struggled with erroneously estimating the depths of trouble before.When computer sales peaked in 2011, shares of the HewlettPackard arm that eventually became the consumer-oriented HP (NYSE:HPQ) initially tumbled, but turned around between 2013 and 2014. PC and laptop sales not only continued to fall, they began to slide in earnest in 2015, wiping away a huge chunk of that rebound.HPQ has since recovered, making a turnaround move in 2016 that persisted through most of 2018. The point isinvestors confused hope with results.Another case of misguided assumptions involves General Electric (NYSE:GE).Although shares of the iconic blue chip turned around in 2009 like most other stocks did, neither sales nor earnings have grown since 2008. And that's even after stripping out the impact of divestitures. Investors largely convinced themselves for years that GE would work its way out of trouble, until 2017 when it became clear that wasn't going to happen.The 80% rout suffered during the second half of 2018 essentially priced in eight years' worth of deteriorating results too few people were willing to see.Neither comparison is a carbon copy of what's making Micron stock so tough to handicap now, though the underpinnings are the same. Namely, investors see the facts they want to believe, and ignore the facts that might conflict with their established conceptions.The masses have largely convinced themselves that Micron is unsalvageable right now. They hold up Changxin Memory and the trade war as evidence, all the while ignoring the fact that Changxin's IP leaves something to be desired, and that the trade war could end at any time as long as an unpredictable President Donald Trump occupies the White House.Meanwhile, DRAM prices are still falling. That's leading many would-be buyers to assume they'll fall in perpetuity, though that's clearly not going to be the case.None of those factors are minor matters. Bottom Line for MU StockIt's not a bearish or a bullish call. It's just a much-needed reminder to not assume the rhetoric surrounding any stock at any given time is accurate. It might be, but it may well not be. And when that stock is a well-watched ticker like MU stock that inherently inspires emotional responses, the rhetoric is all the more skewed.There's no denying the stock's trading at bargain prices right now. Bank of America and Tiernan Ray are both right in that regard. The value argument holds water, even if the DRAM glut and the tariff standoff persist.Value isn't enough though. As irrational as the doubts working against Micron right now may be, as John Maynard Keynes told us decades ago, "the market can stay irrational longer than you can stay solvent."The best course of action here may be to not play the game at all but to find another stock that's proving more predictable.As of this writing, James Brumley held no positions in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Micron Stock Presents Too Much of a Trading Conundrum appeared first on InvestorPlace.
The new Dow Inc (NYSE:DOW) stock and company is the result of a two-stage spinoff of Corteva (NYSE:CTVA) and DOW stock by DowDupont (NYSE:DD) that started on Apr. 1. The split came about because of agitation from an activist shareholder, Third Point's Dan Loeb. No doubt, the main objective was to benefit the owners of DowDupont stock and DOW stock.Source: Roy Luck via Flickr (modified)And of course, the CEO of DOW, Jim Fitterling, boasted about the restructuring. In a press release, he said:"The changes we have made to Dow's portfolio, cost structure and mindset are significant. The new Dow is a more focused and streamlined company with a clear playbook to deliver long-term earnings growth and value creation for all stakeholders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut unfortunately, Wall Street hasn't been so kind to Dow Inc stock. Since early April, DOW stock has gone from $58 to $49. * 7 Value Stocks to Buy for the Second Half The Issues With Dow Inc StockSpinoffs can be disruptive. There is often a large turnover in the shareholder base, which can put pressure on the shares.Yet that overhang will dissipate in the longer term. So could DOW stock now be an interesting value play? Is it time to consider buying Dow Inc stock?Well, I'd still be cautious. DOW is still a complex organization. As seen with other companies like GE (NYSE:GE) and 3M (NYSE:MMM), complexity has become a big drawback on Wall Street. Investors nowadays want agile companies that can focus on growth opportunities and be nimble enough to stave off rivals.InvestorPlace.com columnist Josh Enomoto aptly described the complexity of DOW and how that could be a hindrance:"Dow Inc stock doesn't provide a clean, linear path. Instead, the underlying company is stretched wide, featuring businesses in consumer products, packaging, industrial materials, large-scale infrastructures and technology. From a topical perspective, the separation into three entities streamlined operations for the individual cogs. Somewhat left out in the equation was that the individual cogs also have non-intuitive structures."However, complexity may not be the biggest risk facing DOW stock. Rather, the slowing of the global economy looks to be the main problem.For now, there is little clarity on a resolution to the dispute between the U.S. and China. In the meantime, there is also the potential for trade disputes between the U.S. and Europe.The World Bank has reported that global growth will come in at 2.6% versus its January forecast of 2.9%. That would be the weakest global growth in three years.As for DOW, the company is definitely sensitive to the swings of the economy. When the economy slows, it's easy to put off a decision to purchase new raw materials and commodities. The Bottom Line on DOW StockDOW has positive attributes. Keep in mind that the company continues to streamline its operations and cut costs. DOW plans to eliminate $700 million of costs this year. It is also being more disciplined when it comes to capital investments.As for the valuation of Dow Inc, stock it is fairly cheap. Consider that its forward price-earnings multiple is nine and its dividend yield is a hefty 5.7%.Yet such factors likely mean that DOW stock has some downside protection. However, because of the macro weakness across the world, it could be tough for Dow Inc stock to advance meaningfully.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Has DOW Stock Reached an Attractive Entry Point? appeared first on InvestorPlace.
Air Lease announced three deals so far at this week's Paris Air Show, just as its stock attempts to climb past a flat base buy point.
President Trump’s tweet about the upcoming meeting with Chinese President Xi Jinping helped boost market sentiments yesterday. Qualcomm (QCOM), Intel (INTC), and Advanced Micro Devices (AMD) rose 4.1%, 2.7%, and 4.3%, respectively.
Wall Street opinions on GE stock are quite polarized, so it isn’t surprising that opinions about the value of GE Aviation are wide-ranging, too.
On June 18, GE Aviation's (GE) CEO, David Joyce, said that the company is looking to get $35 billion in new business at the Paris Air Show. He's optimistic about crossing that number by a significant margin.
Heico Corp (NYSE:HEI) has been around since 1957. And since that time it has grown its business into a global provider of parts and equipment for aircraft, defense and industrial companies.Source: Karen Neoh via FlickrGiven all the talk generated in recent days by the merger between United Technologies (NYSE:UTX) and Raytheon (NYSE:RTN), it seemed timely to discuss other specialized and successful companies in the sector that don't get many headlines on a regular basis. The Landscape for HEI StockOf course, there's also the issue with Boeing (NYSE:BA) and its 737 Max8 grounding, which continues. Initially the airlines that owned the planes thought this was going to be a brief suspension of service but it continues to drag on as BA has released a greater number of protocol issues in drips and drabs, rather than coming clean at the outset of the investigation.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAt this point, there are other models that are now getting a good look after some concerns in production have been unearthed in the Max investigation.Add to that the delays that are happening with General Electric's (NYSE:GE) GE9x new engines for BA's massive 777X. * 7 Value Stocks to Buy for the Second Half What all this means for Heico is extra business. You see, modern aircraft are precision machines, and that means they perform at optimal levels, and that means parts wear out quickly.With fewer new planes deployed in airlines' fleets, the demand for parts increases. And that's very good news for HEI stock. In the past year, Heico is up 72% and it's up 66% year to date. Yet, it's only trading at a 58x trailing price-to-earnings ratio. Granted that's not a bargain, but it's below its growth rate.HEI reported fiscal Q2 numbers in late May, and they easily beat analysts' estimates as a whole. Each division also performed well.Another strength for Heico is that it works on both the defense and aerospace side of things as well as commercial aircraft. This means it's not beholden to growing defense budgets or winning those long-term contracts.Its global presence also allows it diversification into the powerful growth happening in commercial travel and logistics in Asia, particularly China. Its long history in the business demonstrates its ability to compete in this dynamic and expanding market.And with just a $15 billion market cap, this could very well be a takeover target for an airplane maker or an industrial conglomerate looking to get a foothold in the sector.Certainly the U.S. defense sector has been the center of attention recently with the UTX-RTN merger, but it's the commercial side that holds the greatest long-term potential.And with private companies moving into the space race, this is another big opportunity for Heico to grow its business. All this is why my Portfolio Grader gives HEI stock a strong A rating.Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Heico Stock Can Keep Your Portfolio Soaring appeared first on InvestorPlace.
(Bloomberg) -- General Electric Co.’s transformation is being led by its aviation business, given the unit’s stability and underlying growth, Citi analyst Andrew Kaplowitz wrote in a note to clients.While the aviation business is not perfect, it does seem to be “operating on all cylinders,” the analyst said. He noted that the company is raising the projected growth for its military segment and continuing to gain share versus its primary competitor with large new orders announced at the Paris Air Show.GE and Safran SA’s joint venture, CFM International, earlier this week also won a $20 billion order for jet engines from Indian carrier IndiGo.“We sense a new energy in aviation and across GE especially regarding cash generation led by CEO Culp,” Kaplowitz added. The analyst maintained the buy rating on GE with a price target of $14.GE is currently undergoing a turnaround process after an unraveling that has wiped out more than 60% of the company’s market value over the past two years, and prompted the diversified manufacturer to divest multiple businesses. While its power turbine business is widely understood to be the most troubled, the aviation unit is often lauded as a competitive, well-run unit.JPMorgan analyst Stephen Tusa, who holds a bearish view on the stock, said the aviation business would have a valuation of about “$60 billion at best,” assuming a 2021 free cash flow yield of about 7%.To contact the reporter on this story: Esha Dey in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Brad Olesen at email@example.com, Jennifer Bissell-Linsk, Steven FrommFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
While nearly all who ponder the trajectory and impact of such controversial subjects as monetary policy have anticipated this Wednesday afternoon's dog-and-pony show for quite some time, there are those who clearly have taken a leap of faith ahead of the jugglers and the plate spinners. While I am unsure of just how dovish leadership at the Federal Open Market Committee (FOMC) reveals itself to be later on, trading volumes for securities listed on the New York Stock Exchange (NYSE) and Nasdaq soared on Tuesday as the S&P 500 (SPX) moved sharply north from the 50-day simple moving average (SMA) that had acted as support for more than a week. Possibly significant would be the fact that this line had been a difficult hurdle for the Nasdaq Composite (COMP) to overcome.
A sizeable chunk of Tuesday's intraday gain was given back before the closing bell rang, though even then the S&P 500 was able to muster a 0.97% win. But, between the bullish gap and the headlines needed to make it happen, it's anyone's guess as to where things go from here.Source: Allan Ajifo via Wikimedia (Modified)Snap (NYSE:SNAP), parent company of Snapchat, was arguably the most noteworthy winner, rallying nearly 10% after BTIG upped its price target to $20. General Electric (NYSE:GE) did more to help the overall market though, gaining almost 4% after long-term doubter John Inch, analyst with Gordon Haskett, conceded that at the very least, GE wouldn't face insolvency. Fanning those bullish flames is a projection that General Electric expects this year's Paris Air Show to yield at least $35 billion worth of orders.Holding the market back more than any other name was La-Z-Boy (NYSE:LZB), down 1.5% during the regular hours session, but off more than 8% in after-hours action after posting poor fourth-quarter numbers after the closing bell rang.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer Except for GE, none make for great trading prospects headed into Wednesday's trading. And for that matter, stock charts of McCormick & Company (NYSE:MKC), FMC (NYSE:FMC) and Pfizer (NYSE:PFE) all look like better prospects than GE from a risk/reward perspective. Here's why. Pfizer (PFE)A little less than three weeks ago, Pfizer was featured as a name that was about to break out, but would have to clear an incredibly tough hurdle to do so. It did so. Namely, it not only broke above the upper boundary of a falling trading range, but broke above the pivotal 200-day moving average line, plotted in white on both stock charts.It's what has happened in the meantime that merits this second look. Although progress has been slow, thanks to yesterday's renewed strength, PFE is entirely back above the 200-day line and now knocking on the door of another resistance level. A move above that ceiling could prove catalytic, as there are no major technical ceilings left standing in the way. Click to Enlarge * The last line in question is $43.34, marked with a white dashed line on the daily chart. That's where Pfizer peaked in April, and where it peaked earlier this month. Shares are one good day away from moving above it. * Beyond that, plotted in red, the highs around $43.80 are the next most likely stumbling blocks, though it's likely they're not a terribly big factor at this point. * Bolstering the bullish case is how much volume took shape behind yesterday's modest advance. It's a subtle hint there are more bulls waiting in the wings, if they can just find enough to be confident about. McCormick & Company (MKC)McCormick & Company shares were nothing but bullish between January's deep low and the rally through early April … a move that reclaimed a miserable last few weeks of last year and rekindled the bullishness from the bulk of 2018.The past several weeks have been decidedly less bullish though. While still making forward progress, that progress was shallow and only driven by a modestly rising support line. And as of Tuesday, that line is on its last legs, and the sellers are starting to turn into a horde. * 10 Tech Stocks to Buy Now for 2025 Click to Enlarge * The support line in question is marked as a white dashed line on both stock charts, tagging all the key lows going back to early April. You have to look closely to see it, but Tuesday's weakness actually broke under that line. * Simultaneously, yesterday's 1.18% setback dragged MKC under the purple 50-day moving average line, which had served as a support line earlier in the month. * Zooming out to the weekly chart of McCormick & Company we can see weakness has already developed in earnest, even if the trend is still "up." The Chaikin line is en route to fall below zero, and we're just one more bad week away from a bearish MACD crossunder. FMC (FMC)Since the middle of last year, FMC has made several attempts to break above what's become a well-established resistance line right around $80.75. Clearly each attempt has failed, resulting on various levels of selloffs.The buyers are at it again though, and this time the outcome may well be different. This time, the effort is starting out from a point that wasn't so deep in the hole. With less ground to cover just to get into position for a breakout thrust, there's more gas in the tank to actually get the stock over the hump. Click to Enlarge * That "hump" is plotted with a yellow dashed line on both stock charts. Although not perfect resistance, it's clear there's something about that level holding FMC shares back. If it can be hurdled, the buying floodgates could readily open. * Last month's low around $71 is a much healthier start to the effort than the December low near $61 was. * Backing out to see the weekly chart we can readily identify a bullish undertow in the Chaikin line as well as with the fresh MACD crossover.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post 3 Big Stock Charts for Wednesday: Pfizer, FMC and McCormick & Company appeared first on InvestorPlace.