Chris Lau
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Chris Lau in Value Stocks,

What Price is General Electric Worth?

GE is in freefall. The stock fell at levels and at a trend not seen since the financial crisis.


GE stock is in the teens.

$GE, GENERAL ELECTRIC COMPANY / H1

Reasons the stock has more downside:

  • Dividend cut will drive out income investors
  • No turnaround plan envisioned
  • No catalyst
  • GE still a bell-weather of old-school companies. Troubles ahead for the businesses GE is in, including lights.

Reasons GE bottomed. Buy:

  • Selling pressure will ease
  • CEO has a 3-5 timeframe for a company turnaround
  • Dividend cut marks bottom for stock
  • At a 15.7x forward P/E, GE is at the cheapest in years.

Related:

Under Armour - UA - in free-fall but has yet to recover.

Cree - an LED lighting supplier, found new highs as markets appreciate its moat and positioning in the market.

Disney fell in the summer as markets fretted over ESPN. Disney has blockbuster movie release, ahead. Stock is back to $100.

Are you a buyer of GE stock? It is not an income stock. It is not a growth stock. Does it have value? The numbers (p/e) point to value but the selling discounted the turnaround risk.

Neutral on GE stock. PT is that the stock is range bound in the $18 - $20 in the next year and $16 - $18 in the near-term.

Buy GE? Yes or no? Discuss with fellow members. 800 strong. Comment below.