General Electric Company (NYSE:GE)

CAPS Rating: 4 out of 5

The definition of a conglomerate, GE offers everything from light bulbs to power plants, jet engines to water processing, financial services to 30 Rock.


Player Avatar valuemoneygreen (79.05) Submitted: 7/25/2012 7:47:47 PM : Outperform Start Price: $17.61 GE Score: -12.49

General Electric Company (GE) is a diversified technology and financial services company. The products and services of the Company range from aircraft engines, power generation, water processing, and household appliances to medical imaging, business and consumer financing and industrial products. It serves customers in more than 100 countries. Effective January 28, 2011, it held a 49% interest in a media company that includes the NBC Universal businesses. Its segments include Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions and GE Capital.

GE has a ton of great businesses. It has pricing power and brand names. This company has done wonderful over its lifetime. Pretty simple here. Great business that will outperform the S&P over a 10+ year time horizon. It earns money and will earn more in the future. It will run pretty close in relative price with the S&P but with the dividends and them being reinvested there is little doubt in my mind this will outperform the market. The price decline from the low to mid 30's to the high teens made this equity attractive for the 1st time since the 90's. This equity should not be bought for much of a premium to the market on a multiple basis though. The multiple of the S&P and GE should be equal if you are hoping to beat the market. The price dropped because of the recession but GE Capital causes the buying opportunity. This took all of the premium of the stock price out. Currently a PE of 16.3 and a forward PE of 11.49.

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