Where Will General Electric Go Next?
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 plans to intensify research focusing on complex energy projects such as waterless fracking and gas turbine efficiency by earmarking an additional $10 billion through 2020 for its “ecoimagination” budget. The new spending is set to be announced by Chief Executive Jeff Immelt on Monday. The research budget shows how reliant GE has become on the energy industry, its fastest growth area, as it works to become a dominant supplier of equipment and services to oil, natural gas and alternative power companies at a time when the United States undergoes an unprecedented energy boom. While GE doesn’t forecast what it plans to spend on its main capital budget in future years, the new commitment gives investors a clue as to what the company’s priorities will be into the next decade. The “ecoimagination” project, which was formed in 2005 to broadly focus on sustainability and other environmental issues and has cost nearly $15 billion, had been set to expire next year. Executives are extending it to 2020 with the additional $10 billion.