General Electric (GE)

Not an expensive stock. Trading at 15X earnings. Really nice dividend yield of about 3.5%. His problem with the company is the reality of what drove them to high multiples, which was GE Capital. That is now being sliced and diced and pushed out of the business. They had a move to the oil/gas business in a way and that is hurting them. Feels it is fairly priced at these levels.

(A Top Pick Feb 13/14. Up 6.7%.) Also, the US$ has appreciated by about 14%-15% against the Cdn$. This is a laggard to some of the other names right now because of its exposure to the energy space, but the stock should be supported by the improving global demand in longer infrastructure cycle businesses such as power generation, water infrastructure and jet engines. Pays a 3.5% dividend yield. Still likes it.

Earnings and revenues seem to be flat along with its metrics. The chances of it breaking through $25-$27 are remote.

This is such a large cap conglomerate type business that if the US economy does well, a lot of the businesses that they are in should appreciate. You get a bit of a dividend yield while you wait. Has lagged the market over the last couple of years, so could play catch-up.

A great conglomerate. It has been reengineered into a great company. It is like buying the global industrial space. A rock solid dividend.

Going through a transition right now. Sold off their credit card business and are focusing more on the industrial side. There is cost-cutting, buy back and they are aggressive with the dividend. If it were between $15 and $20, he would be an aggressive buyer. At these levels, with 6%-8% EPS growth and a dividend yield of around 4%, you are looking at a return of 8%-12% going forward.

(A Top Pick Feb 13/14. Down 1.28%.) His Canadian clients are still up 13% because of the currency. Thinks this company will continue to do well with a couple of longer-term trends. The general market improvement will help them along with global demand for longer-term infrastructure types of businesses. They are simplifying their businesses and getting out of some that they shouldn’t be in. Sticking to more of their core industrial operations. Dividend of 3.75% will be increased.

(A Top Pick Jan 7/14. Down 8.93%.) This disappointed on the financial side as US financials got squeezed. As an industrial, it has all kinds of great things that they have not as yet been able to translate into earnings growth. His clients in Cdn$’s are up 6% in the past year because of the exchange rate.

Basically 2 companies, industrial and financial services. The financial services gets painted with the same bad brush that other financial companies do. Until you see financials come back, you aren’t going to see this company do a whole lot. This is a huge, huge company, and to move the needle would have to be some drastic projects or a real change in sentiment. Depending on your market view, this could be a good Hold.

Sold his holdings recently. Wasn’t impressed with their Alstom deal in France. Also, saw the US$ was showing significant strength against the euro, so he decided to pare back on his industrial holdings. They also have some energy exposure.

He would not enter here. He has been negative on GE-N for 15 years. $21.29 model price, negative 21%.

This has 2 periods of seasonal strength. One is around this time of year. This is an industrial stock and responds like an industrial. Normally from the middle of October to the end of the year is one period of seasonal strength. The other one is from around the end of February to the end of May. From around the end of the year until February, the stock doesn’t do very well, so you may want to take some money off the table and look for better opportunities. If you are a longer-term investor, you want to hold until May of next year.

Dividend is definitely safe. They pride themselves on stability and long-term benefits to shareholders and shareholder value. Have some exposure to Russia, but not extreme and isn’t something that should be factored in. Their oil exposure is something you have to take into account. Have been acquirers of oil properties and oil expertiseover the last several years. In divesting other areas of their business, oil has taken on a larger percentage of their business.

Is in transition. It was a much more of a financial stock and is not in the throes of being more of an industrial and less of a financial, but trades more like a financial still. Cheaper than Honeywell or 3M or UTX-N.

We are actually in a period of seasonal strength for some of these industrial stocks. The average gain for the month of December is about 4.1% and is positive 65% of the time. However, looking at the chart, there is some resistance at about $27. He would like to see it clear that. If it did, that would be a new Buy signal. He would hold off for now and wait for it to clear that resistance. Even though it is strong in December, it tends to be weak in January and February, followed by a spring run up from March through to May.