Where Will General Electric Go Next?
With shares of General Electric (NYSE:GE) trading around $26, 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, many of which are essential in daily lives of consumers and companies around the world.
General Electric is in talks with France to refine guarantees on jobs, planned investments and access to nuclear technology under its $17 billion bid for Alstom SA’s energy assets ahead of a June 23 offer deadline, people familiar with the matter said. The negotiations are intended to help set GE’s plan apart from Siemens (NYSE:SI) AG’s proposal, said the people, who asked not to be identified because details are private. The measures include an independent audit to back up GE’s vow to create 1,000 industrial jobs in France as part of an Alstom deal, one person said. While GE doesn’t intend to increase the cash component of its offer, the U.S. company is willing to continue discussions with the government on several topics, including ensuring that French interests retain access to nuclear technology and a possible GE-Alstom partnership in railroad signaling, the people said.
GE also is willing to make commitments for future spending on France-based operations, one person said. France’s role is pivotal as political leaders seek concessions on issues such as local employment and the country’s energy independence. Steve Bolze, chief executive officer of GE’s power and water unit, and the lead negotiator, John Flannery, are in France for meetings this week, one person said. GE’s team “had good, constructive meetings with the French government again,” the Fairfield, Connecticut-based company said yesterday in an e-mailed statement. “We are making progress and are very confident in our proposal.” Alstom’s board has given preliminary approval to GE’s bid. The French company said it would consider other offers before the June 23 deadline, and Siemens unveiled details of a joint bid with Mitsubishi Heavy Industries Ltd. (7011) for Alstom’s energy operations on June 16.