General Electric (GE)

The glory days of those old growth parameters under Welsh are over. It was a different story back then. Too big a ship to move in the same way. The restructuring in the past couple of years makes sense. In the short term, there are going to be some headwinds as global capital spending slows. The strength of the US$ is a bit of a headwind.

Had owned this through both good and bad times. It is becoming more focused as a health care industrial and energy services. He still likes the long-term, but it has been disappointing. Doesn’t look like it is going anywhere in a hurry.

He is positive on the industrial space, but there are a lot better names you can own. Recommends you move from this and into the SPDR Industrial ETF (XLI-N) or something similar. This is a work in progress, but it is like moving a battleship.

He is pretty positive on the US economy and global growth, particularly to what is happening in Europe. These are good leverage points for this company. GE is essentially a proxy for global growth. He would probably look for something a little smaller such as Honeywell (HON-N), which would be a little nimbler and focused towards the technology side of the industrials. (See Top Picks.)

A behemoth type of company and is in lots of different industries. Finally sold off their financial services. This has come off because they are getting into the Cloud and software. When you try to grow a business this big, it is very tough to do. The market is a bit nervous, so it is kind of a “wait and see” stock.

(Top Pick Feb 4/16, Up 4.82%) They need to up their earnings. He thinks we are going to have this infrastructure play. He still holds it.

This started a trading range at the beginning of the year and he picked this up at about $28. It is now approaching the lower part of its range where he would Buy it again. It might stay range bound for a while. (Analysts’ price target is $33.75.)

A great business. It is essentially a pure industrial play now, which allows them to be more focused, and that is after selling $70 billion of assets by the end of 2015. The French engineering firm they acquired was the largest acquisition they had ever done, but that is starting to really gain traction.

A good stock and a great company. Relatively cheap trading at roughly 18X this year’s earnings and 15X next year’s, sort of in line with the market. Not a table-pounding buy, but a good core holding for a portfolio. Also, pays a decent yield while you are waiting.

Likes industrials in general. Given that it is in many higher technology areas, whether aircraft engines or longer-term infrastructure projects, he likes the name a lot. A little expensive at 21X earnings with a 10% growth rate, but the dividend is good. The stock is trading well above the 250 day moving averages. Nice dividend of 3.1%.

This has been repositioning its portfolios businesses over the last 5-6 years since the financial crisis. They were decreasing their exposure in GE Capital, retrenching in those businesses and selling off some. In October they announced a joint venture with Baker Hughes where GE is going to own 60%. They still have 8 different reporting segments, with none accounting for 20% of their earnings. Still very diversified. Trading at about 20X forward earnings, so it is not really that attractive. With divesting of assets, they have to replace the earnings those assets were generating. They’ve been putting some of that money into share buybacks, but that can only go on so long. She prefers others.

(Top Pick Feb 4/16, Up 11.43%) Once they throw off GE Capital this will be a renaissance industrial corporation. Then his model price would go substantially higher. But none of that has happened yet. It has a 3% dividend. His model price is 15% below the current price.

An industrial name that has benefited a lot since the Trump election, because it is mostly an industrial type company. He likes that it is not as financial as it used to be. They are buying some good assets. Has a decent yield.

It can do well because of Trump. He sees a reasonable amount of upside and a nice dividend.

It was a failed stock and the price reflects the stock. Revenues are up 8% over 15 years with flat profits. They made a big acquisition a couple of years ago in France, but it is not the best business environment with French labour laws. They probably over paid for the deal. Stay away from GE-N.