General Electric (GE)

Not a stock he is interested in. When he screens his 7000 global stocks, he whittles the list down to about 165 companies that are generating consistent free cash flow. This gives them the financial flexibility where they can continue to grow and innovate. GE’s free cash flow has been declining at a huge rate, partly because of the spinoff of the credit business they had. As far as investors are concerned, this is very slow on the uptake. Prefers others such as Littelfuse (LFUS-Q).

With what Trump is doing, and this company’s exposure to energy infrastructure exposure to the US, you just hang onto this. Dividend yield of just under 3%.

He loves this, but are not moving fast enough for him. Looking at alternative energy, this company is perfectly positioned. He likes that they spun out GE Capital. They need to substantially increase earnings to get going.

(A Top Pick Dec 8/15. Up 6.23%.) He has a model price of $25.60, an 18% overvaluation. Anticipates that once they get rid of GE capital, etc. that model price will go up substantially.

(Market Call Minute.) A great way to participate in an improving US economy. They’ve made a big bet on energy, so this is another way you can get some leverage to the energy sector. A good solid business and they pay a nice dividend.

(Market Call Minute.) A very disappointing company. Not sure why the CEO gets the credit he does. Revenues in total over 15 years has grown only 17%. Cash flow per share in earnings per share is flat.

This is probably a better company today than it was in 1997 when they were getting into all kinds of financial engineering/financial companies, which were much riskier. A very solid company that will grow with the global economy. They are a free cash flow generator.

(There is some kind of a deal with Halliburton.) He doesn’t see how they could have done that acquisition without spinning the assets and getting access to financing as a result. Has been very concerned with their decreasing free cash conversion that they have reported over the last several years. He puts this one on the “too hard” pile.

(A Top Pick Nov 2/15. Up 9.34%.) He likes the industrial space, but he has morphed more towards midsized companies that are more domestically focused. With the strength of the US$ versus the world currencies, there has been a pickup in the mid-cap part of the market. Doesn’t think you will get hurt with this. A great company and exceedingly well managed.

Market Call Minute. She would hold this for the recovery in the US as a diversified industrial company.

(A Top Pick May 4/15. Up 18.14%.) This has effectively transformed itself by spinning off their financial assets and its real estate. It has a good dividend. As the US economy and global operations in Europe continues to recover, there is more upside here.

(A Top Pick Oct 1/15. Up 20.65%.) This was coming to the end of the transformation that Jack Welsh had done of making it a financial stock instead of an industrial stock. It has pulled off a little in the short term, which gives you an opportunity. This has become a big player in energy infrastructure type stuff, which is why it has been coming off a little. Dividend yield of 3.1%.

(Top Pick Oct 26/15, Up 1.46%) He still likes it. He is there for the yield. Clinton will come out with a $trillion infrastructure spending and he is there for the infrastructure play. They have the best quality assets in terms of alternative energy. Short term there is pressure to go to $26.80. Buy it there if you want to buy it.

Doesn’t follow this one, however along the lines of Johnson & Johnson and Honeywell, you are probably not going to go bankrupt owning them. They are getting out of their financials and back to being a pure industrial, which he likes. 3.1% dividend yield. Not a bad company.

The US$ rising would be a negative for this company as it is a true global multinational. Overall it is a great company with good management. They have seeded and got a whole new group working in Silicon Valley, so the company has changed culturally. Have become a much more dynamic company, as well as moving out of the suburbs.