Can General Electric Move Higher?
With shares of General Electric (NYSE:GE) trading around $25, is GE an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
General Electric is a diversified industrial, technology, and financial services company that operates worldwide. 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. General Electric’s segments are Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital. General Electric is a leading provider of a wide range of products and many are essential in daily lives of consumers and companies around the world.
General Electric filed for an initial public offering of its North American consumer lending unit as part of Chief Executive Officer Jeffrey Immelt’s effort to reduce credit risks and focus on industrial businesses. The spinoff of Synchrony Financial, as the unit is now called, will help Immelt reach a goal of reducing GE’s dependence on finance to 30 percent of earnings while GE Capital sheds a finance unit that’s not linked to products GE sells, including jet engines and gas turbines. “When you look at this business they’re spinning off, there’s little justification for why they should be in that business in the first place,” said Gary Flam, a fund manager in Los Angeles with Bel Air Investment Advisors LLC, which owns 818,678 GE shares, according to data compiled by Bloomberg.