Matthew Waterman
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Matthew Waterman in Brand Power,

GE Overheated. So I Am Selling Before The Meltdown.

There are certain companies that I try to always have in a portfolio as much as possible. One of them is General Electric (GE). Before spinning off Synchrony Financial (SYF) in 2014, the company's earnings were in more or less a stagnant phase. The spinoff helped them focus more on their core business, and so now it's time to reassess things. About 9 months ago, GE started to decouple itself away from the performance of the broader market:

That alone isn't reason to sell, but earnings growth hasn't made the same kind of progress that the stock price has during that time, and today they are selling at 44x trailing P/E. The current yield is lower than many other stocks I'm interested in owning at lower valuations, so it's hard for me to find motivation to want to continue to own it at this time. I'm out for now and will look to get back in at some future time. I used some of the proceeds to purchase the aforementioned Synchrony Financial. The rest is going back to my hedge.