70.08 +0.02 (0.02%)
After hours: 4:40PM EDT
|Bid||69.19 x 900|
|Ask||70.36 x 900|
|Day's Range||69.39 - 70.62|
|52 Week Range||61.95 - 115.40|
|Beta (3Y Monthly)||1.56|
|PE Ratio (TTM)||35.84|
|Earnings Date||Jul 30, 2019|
|Forward Dividend & Yield||0.48 (0.69%)|
|1y Target Est||88.13|
Long-beleaguered shares of General Electric (NYSE:GE) would have to climb less than one dollar for nearly everything, including the rhetoric surrounding GE stock, to change for the better. But, in football parlance, that last few inches to a first down may as well be forty yards. Falling short is falling short. Click to Enlarge Source: Shutterstock And analysts aren't helping.On the verge of a breakout, UBS analyst Damian Karas lowered his stance on General Electric stock this week, from a "Buy" to "Neutral." Karas believes the 40% rebound from the late-2018 low is about as much as GE stock is capable of rallying right now, without more progress on the cash flow front. The analyst is also suspicious of the company's power arm, which has proven to be dead weight for years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHe may be right. But, the right nudge could readily change not just how the market interprets information about General Electric, but change the criteria being used to judge GE. * 7 Stocks Top Investors Are Buying Now GE Stock and the Failing ComebackIt's an idea that's been posed before, but merits repeating. General Electric shares aren't a typical equity at this time. They're a psychological chess match.Players are aiming to figure out how other players will feel about the most plausible headlines anywhere from six weeks to six months from now, including the potential sale of assets like last year's sale of its locomotive business to Wabtec (NYSE:WAB), or this year's planned sale of its life sciences division to Danaher (NYSE:DHR).Everyone's playing the game too, including the media, and including analysts. Most don't know they're playing the game, but 'being right' about General Electric would be a nice feather in someone's career cap.To that end, the chart's been largely leading the rhetoric, rather than the other way around. It's arguable that UBS' Karas would have remained bullish and raised his target had GE stock started July as bullishly as it ended June. The downgrade didn't take shape until General Electric shares had decidedly stalled.That chart, however, is still oh-so-close to the technical breakout that could serve as a paradigm shift.There are actually two lines in the sand to watch. One of them, $10.53, where GE shares peaked several times since February. It's plotted in red on the daily chart.The other is $10.73, marked as a blue dashed line on the image. That's where General Electric shares peaked a couple of times late last month. GE stock actually traded above levels in late February, but the two aforementioned lines have been highs multiple times.Though unable to clear either ceiling yet, that's the direction things are moving. GE has made a string of higher lows since the end of last year, and that effort is relatively well organized. That is, the key lows are lined up, creating a technical floor that's likely to halt any pullback. That floor is marked as a yellow dashed line.The shape of the chart itself, however, is bullish.The converging support and resistance lines are squeezing GE stock into the tip of a wedge pattern bullishly, building up pressure the entire time. If-and-when General Electric is finally forced out of the confines of the wedge, traders could make up for lost time.If that break is pointed upward, look for a slew of upgrades. Look for the headlines to suddenly change their tone and timbre. Look for cash flow to matter just a little less. Looking Ahead for GE stockDespite a handful of respectable efforts, General Electric are having trouble with a tough ceiling.Still, it's noteworthy that Karas' newest ho-hum opinion of GE came with a clear escape plan:"We expect new management to make the right decisions, which will take time…Much of the risk is now priced in and we think the stock will take a breather on a relative basis until we get more clarity on individual assets. In particular, we flag Power, which hardly contributes to GE's equity value today but we think could dominate sentiment into 2020."He's absolutely right in that regard -- sentiment remains the key.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post The Big Comeback for GE Stock Is Going to Keep Stalling appeared first on InvestorPlace.
Westinghouse Air Brake Technologies Corp NYSE:WABView full report here! Summary * ETFs holding this stock are seeing positive inflows * Bearish sentiment is high Bearish sentimentShort interest | NegativeShort interest is high for WAB with between 15 and 20% of shares on loan. This means that investors who seek to profit from falling equity prices are currently targeting WAB. However, the last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment. Money flowETF/Index ownership | PositiveETF activity is positive. Over the last month, ETFs holding WAB are favorable, with net inflows of $8.72 billion. Additionally, the rate of inflows is increasing. Economic sentimentPMI by IHS Markit | NeutralAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Industrials sector is rising. The rate of growth is weak relative to the trend shown over the past year, however. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
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.
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.
One of Pittsburgh's best known developers now owns one of the city's most visible office properties. After first announcing that a deal was in the works in early May, Green Tree-based Burns Scalo Real Estate closed on buying 225 North Shore Drive in a transaction that was finalized on one of the last work days in June.
Wabtec Corporation announced it will report 2019 second quarter results before the U.S. financial markets open on July 30, 2019. The company will conduct a conference call to discuss those results with analysts and investors at 10 a.m.
Wabtec Corporation (NYSE:WAB) shareholders should be happy to see the share price up 15% in the last month. But that...
General Electric (GE) is likely to gain from restructuring efforts, organic growth opportunities in some segments, reduction of debt levels and expansion in emerging markets.
Shares of Wabtec skid after the company receives an analyst downgrade amid weaker-than-anticipated North American freight rail fundamentals.
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.
Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly […]
With all due respect to the analyst community, please stop handicapping General Electric (NYSE:GE) as if it's possible to know where the company will be a year from now. Likewise to investors, be wary of treating GE stock as if it reasonably compares to peers such as Honeywell International (NYSE:HON) or Danaher (NYSE:DHR).Source: Shutterstock GE is, more than anything else right now, an enigma… an idea. Choosing not to acknowledge it as such could prove frustrating.That's not intended as an insult to parties on either side of the capital-markets table, to be clear. The aforementioned pitfalls are easy to stumble into; I've stumbled into both traps more than once myself.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 High-Quality Cheap Stocks to Buy With $10 But, as a guy who's been in the investing business for 20 years now (with the gray and thinning hair to prove it) I can say I've seen, heard, and done it all, most of it twice.That includes the current General Electric story and all of its nuances; same story, different name. And, the fact of the matter is, nobody has a clue General Electric is really going. They're all guessing. We're all guessing.There is one thing I am confident of though. That is, if GE stock can clear one key technical hurdle, all that rhetoric is going to turn bullish in a hurry, driving what could be a decent bullish swing trade that may well flag the long-awaited, bigger turnaround. A Closer Look at GEIt's not a reality too many in the financial media and investment-advice business care to concede, but sometimes, our best guesses still aren't all that good.It's a rarity, to be fair. People paid to pontificate tend to have a rather firm grip on things that are taking shape with the economy, the market and with individual companies.This isn't one of those times though. General Electric has thrown a lot of people for a loop.But, at least the professionals at this dance have to chime in with something on the company.Reality: The sale of General Electric's assets like its locomotive arm to WabTec (NYSE:WAB) and the rumored liquidation of its aviation finance arm are seemingly steps in the right direction. GE needs cash to shore up liquidity problems, and selling assets is the quickest way to raise liability-free cash. Bear in mind, however, the company is selling revenue-bearing and in many cases profit-driving assets.Some say there's more upside to paring itself down, but others are less convinced divestitures are the right move given the company's cash-flow challenges.Its Power arm is in trouble too. Let's not pretend like that's not at least partially the result of persistently tepid oil and gas prices though, admittedly underscored by a lack of product development.The former remains entirely out of the company's control, no matter how well General Electric regroups its power business from the inside.The biggest X factor of all though is the unknowable. Right now, there are simply an overwhelming number of unknowables muddling up a clear view of the company's fiscal strength.Perhaps more so than any other outfit seen in the modern market era, General Electric is a moving target… multiple moving targets, in fact. Nobody really knows what lies ahead, even if their thesis seem rock-solid and well-polished. Looking Ahead for GE StockThat's not to suggest GE stock has to be avoided. Indeed, General Electric has the potential to be very rewarding for the right kind of trader.The key is simply understanding that the chart of GE stock right now is driving opinions of the stock as much as it's being driven by them.To that end, we're all lucky in the sense that investors have collectively, unconsciously drawn their line in the sand. It's $10.48, where GE stock has peaked a couple of times since March.It's working on another test of that technical ceiling right now, but is starting that effort with the benefit of its first streak of higher lows since 2016.Notice GE shares have also crossed back above the 200-day moving average line, plotted in white, and this time seem a little more willing to stay here.Zooming out to the weekly chart we can see this week's strength presses against the line that's capped all the key highs going back to May of last year.Clearly there's more work to be done. But, if General Electric shares can move above its recent ceilings, it becomes much easier to justify buying.It also becomes much easier to justify upgrades; don't think for a minute analysts' handling of the turnaround story aren't being scrutinized more than they normally might for other names.Just wait and watch. The Final WordI'm all too aware that penning these kinds of ideas is maddening to a whole slew of people… professionals as well as amateurs. The notion that a chart can lead to opinion changes rather than the other way around is often dismissed. And, there was a point in time, years ago, when such an idea should have been dismissed.The market's changed though. Fundamentals don't matter nearly as much as stories do, assuming that fundamentals mean anything anymore. In the case of General Electric right now, they may not.Whatever the case, don't kid yourself about what GE stock is here. You're not making a bet on the company by buying it now, or after any cross above $10.48.You're making a bet on how the masses are going to feel about GE at some point in the foreseeable future. Indirectly, you're betting on how analysts are going to change their opinions when they absolutely have to.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 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post The Problem Is, GE Stock Is Just Unknowable Right Now appeared first on InvestorPlace.
After a shaky May for markets following the trade war drama between the US and China, TD Ameritrade's IMX, a monthly review of investor behavior based on its client's portfolio activity, reported a modest 7 percent increase from April's score of 4.61. This is the highest IMX score in six months. Despite increased trade tensions, investors increased their overall exposure to equities throughout the month.
TD Ameritrade clients increased exposure to equity markets during the May IMX period, increasing the IMX score by 6.94% to 4.93, up 0.32 from the previous period. TD Ameritrade clients were net buyers ...
Wabtec Corporation announced today that its Board of Directors declared a regular quarterly common dividend of 12 cents per share, payable on August 23, 2019 to holders of record as of August 9, 2019.
After a white-hot start to 2019, it has been a wild ride for investors. As the war of words has progressed in the trade battle between China and the U.S., price volatility has been on the rise. Investors tend to shy away from volatility, which is a word that generally is only mentioned when prices are moving lower. In fact, the CBOE Volatility Index (VIX) is often referred to as the "fear gauge."However, seasoned investors realize that volatility can be your friend. "When you put it all together, this is a healthy time to come into the market for the long term," said Thorne Perkin, president of Papamarkou Wellner Asset Management, to CNBC on May 16. "We always look at these pullbacks as buying opportunities for the long term." * 7 Stocks to Sell Amid an Escalating Trade War In short, attractive investments are out there if you're willing to dig a little deeper. Here are seven stocks primed to take off. I sourced these companies by looking for stocks with a bullish "strong buy" Street consensus on TipRanks. That's based on all ratings received in the last three months. Plus I also ensured that the average analyst price target indicates attractive upside potential from current levels.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith that in mind, let's dive in now: Stocks to Buy: Health Insurance Innovations (HIIQ)Health Insurance Innovations (NASDAQ:HIIQ) is a leading developer of affordable, web-based individual health insurance plans. According to the Street, this is a company with huge upside potential."We believe that HIIQ is well-positioned to benefit from increasing demand for short-term medical products. We expect top-line growth of 24% in 2019 and 3-15% annual top-line growth for the rest of our explicit forecast" reveals Cantor Fitzgerald's Steven Halper. "HIIQ shares remain inexpensive, in our opinion, as they trade below our DCF-based price target of $75."Given the current sub-$25 share price, this translates into 200% upside potential! And before you dismiss this, note that Halper ranks No. 129 out of over 5,000 analysts for his strong stock picking skills.The analyst adds "We reiterate our view that concerns regarding HIIQ's exposure to FTC lawsuit against Simple Health are entirely overblown." This is regarding the dispute between the FTC and one of the company's former distributors, Simple Health. However a recent disclosure shows that HIIQ is not a defendant or party in the case and is in regular dialogue with the FTC. "This disclosure, in our view, should put to bed any lingering concerns regarding HIIQ's exposure to Simple Health" says Halper.Raymond James analyst Randy Binner echoes this message -- he believes the resolution of the matter will be positive for shares. Indeed, HIIQ boasts seven recent buy ratings from the Street. Its average analyst price target stands at $65 (160% upside potential). Interested in Health Insurance stock? Get the HIIQ Stock Research Report. Wabtec Corp (WAB)Welcome to our second pick, Wabtec Corporation (NYSE:WAB) -- an under-the-radar stock poised to outperform. Wabtec is one of the world's largest providers of tech components and services for the rail industry. It has products on virtually all U.S. locomotives, freight cars and passenger transit vehicles, as well as in more than 100 other countries.That means the stock is perfectly positioned to benefit from the accelerating growth of global transit rail markets -- especially following the transformative $11 billion GE Transportation merger."We see Wabtec as the number one rail automation play" cheers Cowen & Co's Matt Elkott. "WAB pays a dividend and is well positioned for organic and external growth. This deep value, income and growth trifecta should appeal to new long-term investors" cheers Elkott. * 7 Stocks to Buy for June He reiterated his WAB buy rating on May 22 with a $92 price target. That indicates sizable upside potential of over 40%. "WAB now trades at ~11x adjusted 2020E EPS, almost half the multiple of its closest comp KBX, a discount unwarranted by fundamentals" the analyst tells investors. Note that the Street shares this perspective. Although only three analysts cover WAB, all three rate the stock a "buy." Get the WAB Stock Research Report. Amazon (AMZN)This list also includes one of my favorite FAANG stocks -- Amazon (NASDAQ:AMZN). Amazon has everything going for it right now. Despite a 7% pullback in the last month, shares are still up 23% so far this year. And plenty of upside potential lies ahead. According to Piper Jaffray analyst Michael Olson, AMZN stock is on track for some impressive share gains. Even better, these gains are possible without much "extra' work from Amazon:"We believe AMZN shares will reach $3,000 by sometime between mid-'21 and mid-'22 or within 24-36 months," Olson calculated. This equates to a rally of about 65% from current levels. "We have a high degree of confidence that AMZN shares can reach this level with no major acquisitions or other significant changes to the business.""Adjusting for the value of the AWS segment and Advertising (within "Other"), the company's core retail segment is trading at a level that implies that business is valued below a traditional brick & mortar multiple of sales," he explained. A potential Amazon Web Services spin off would also highlight the "relatively low valuation of the other segments," the Top 100 analyst added.With 35 "buy" ratings in the last three months, Amazon has a full show of support from the Street right now. Meanwhile the average analyst price target of $2,230 indicates upside potential of 23%. Get the AMZN Stock Research Report. Intercept Pharma (ICPT)Biopharma Intercept Pharmaceuticals Inc (NASDAQ:ICPT) is one of the best-rated healthcare stocks right now, according to TipRanks. This is a company developing chronic liver disease treatments using its special bile acid chemistry. Its lead product candidate, obeticholic acid, or OCA, is a bile acid analog already approved for primary biliary cirrhosis (PBC).Crucially, the drug is now also in development for non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC). According to Reports and Data, the global NASH market is expected to reach $13.38 billion by 2026. In short, we are looking at a very lucrative opportunity for drug companies.RBC Capital's Brian Abrahams has a buy rating on ICPT with a $143 price target (69% upside potential). Abrahams calculates the current PBC indication has $400M potential, but that approval of OCA for NASH could create a significant additional $2.5 billion-plus opportunity. "We believe that OCA's efficacy profile is supportive of approval" says the analyst."With stable growth in PBC, a high likelihood of first-to-market approval in large NASH market with meaningful effect on fibrosis, and enthusiasm among physicians, we believe shares currently underappreciate OCA's peak revenue potential" the analyst writes. * 7 Utility Stocks to Trust for Retirement What's more, he draws parallels between Intercept and InterMune, which Roche ultimately acquired for $8.3 billion. "While we acknowledge it is not a perfect apples-to-apples comparison, we believe the similarities do further highlight the significant valuation disconnect for ICPT" says Abrahams. Out of the 11 analysts polled, 10 rate ICPT a "buy." And their $165 average analyst price target suggests even greater upside potential of 96%. Get the ICPT Stock Research Report. Aphria (APHA)If you are looking for a marijuana stock with plenty of growth potential, look no further. Low-cost Canadian cannabis producer Aphria (NYSE:APHA) has only buy ratings from the Street. Their average analyst price target of $11 indicates shares can spike 60% from current levels. That's on top of the 11% growth already experienced year-to-date.Jefferies' analyst Owen Bennett has just initiated coverage of APHA stock. His bullish review of the stock sent shares soaring 8%. "On our strategic scorecard Aphria scores highly, and third overall behind only Canopy and Aurora," Bennett told investors. "Despite its strong global outlook, its valuation is the cheapest across our space, with allegations around inflated assets/insider deals weighing."The company suffered a disastrous 2018, featuring a hostile takeover attempt, the exit of its CEO and allegations from a short-seller that insiders profited from acquiring international businesses at highly inflated prices. However a special board committee found that the price paid for businesses in Latin America was acceptable. And with chairman Irwin Simon now acting as interim CEO, this cannabis stock is ready to rebound. "With these issues now seemingly cleared up, as the company continues to execute, and with likely positive developments on U.S. optionality/Canadian derivatives, we see significant re-rating" says Bennett.Intriguingly, the analyst also adds: "In Canadian derivatives we think there's a good possibility of a vapor partnership with Pax." Bennett has an $11.14 price target on APHA stock. Get the APHA Stock Research Report. Alibaba (BABA)Chinese e-commerce giant Alibaba (NYSE:BABA) has taken a bit of a hit recently. Shares are down 19% over the last month. But that just means we are looking at more compelling upside potential of 40%. That's based on the stock's 16 recent back-to-back buy ratings and bullish $217 average price target.Five-star Stifel Nicolaus analyst Scott Devitt has just reiterated his BABA buy rating. But even more promisingly, he has now added Alibaba to the firm's elite 'Select List' of favorite stock ideas. "We continue to like Alibaba as a leading global eCommerce company that holds a dominant market share in China online shopping and operates an efficient, commission/ advertising model in its core marketplace businesses, Tmall and Taobao" explains Devitt. He has a $220 price target on shares (45% upside potential).For investors concerned about U.S.-China tensions, you can breathe easy. According to Devitt, Alibaba has "limited exposure" to the ongoing trade war. Luckily, cross-border business between the U.S. and China is a relatively small component of total company revenue. And long-term trends like the growing middle class and an increasingly services-based economy are more important to Alibaba's growth trajectory, says the analyst. * 5 Safe Stocks to Buy This Summer Additionally, as Joe Tsai pointed out, Alibaba is on the right side of the issues surrounding the trade conflict, such as China becoming more open to foreign businesses, intellectual property protection and the shift towards digitization. Get the BABA Stock Research Report. Verint (VRNT)Verint Systems (NASDAQ:VRNT) is a software stock specializing in customer engagement technology. Unfortunately for Verint, a bear report has just sent shares spiraling 8%. Bad news for Verint, but good news for us. Bear in mind, on a year-to-date basis, shares are still up 34%.Short seller Spruce Point Capital claims the company is using M&A to hide low organic growth. Verint has already released its own counter-statement saying "We stand by … the recently provided long-term organic growth targets for revenue and margin expansion."Analysts are providing further support to VRNT's statement. This is a company with 100% buy ratings from top-performing analysts. That means no hold or sell ratings in the last three months. One of the analysts is Wedbush's Daniel Ives. He calls the selloff "pure noise" and writes "we strongly disagree with all the issues raised [in the report].""As we have seen the company emerge from the post Comverse dark days into a $1 billion+ revenue thriving company today and successfully beating the Street's forecasts for the last 6-8 quarters, it is NOT a surprise that now some of the bears will come out of hibernation mode and try to poke holes in the company's emerging success story" Ives tells investors.He believes we now have a "golden buying opportunity" to own this secular growth name that "is still in the early innings of penetrating its installed base with a holistic cloud strategy." According to Ives, another guidance raise for the year is likely. Get the VRNT Stock Research Report.TipRanks.com offers exclusive insights for investors by focusing on the moves of experts. See what the experts are saying about your stocks now at TipRanks.com. As of this writing, Harriet Lefton 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 Stocks to Sell Amid an Escalating Trade War * 5 REITs to Buy While They're Dirt Cheap * The Only 3 Marijuana Stocks You Need to Own Compare Brokers The post 7 Stocks to Buy for Monster Growth appeared first on InvestorPlace.