General Electric (GE)

There are still good opportunities here. They are getting back to their knitting. There was a period of time, post 2008, where the market punished them because they had become too committed to GE Capital and too diversified outside of their industrial roots. Now getting back to their industrial roots and people are starting to forgive them for the 2008 situation. The multiple differentials between some of the other major industrials is starting to shrink. Likes this one long-term.

Prefers more specific areas to get the growth. If the spin off of the financial side does well it will be a huge plus. It could be a long term hold.

Couldn’t find it as compelling as some others in his portfolio but it came up on a screen. Trading at a cheaper valuation from the overall market. On a pullback it could be interesting, but he sees no catalyst for a correction.

Thinks we are improving economically so don’t exit the stock. Thinks there will be a rally towards the end of next year.

Really well-run business. Went through a few problems in the financial crisis, but now have a really good assortment of really good industrial businesses. Good long-term stock. If you don’t own, wait for a bit of a correction.

Has really been punished as an industrial for becoming too financially oriented through the 2007-2008 period because of GE Capital. They were trading at probably 2 multiple points below what all the other US industrials were trading at. He saw that this was a company that was growing its earnings at a rate that was as good as, or better than a lot of the other industrials. They have gotten back to their industrial roots.

He believes in worldwide global recovery. This company has everything that they need to participate. They have a real direction and know where they are going to go. Great balance sheet and great management.

(Market Call Minute) GDP dependant and reducing financial services weighting which will be very good for the company.

(Market Call Minute.) He would be buying this as a large cap conglomerate industrial in the US. Good cost-cutting potential.

Likes this quite a bit. Bought this in August because it was trading at a 2 or 3 multiple point discount to the rest of the industrials. People are starting to forgive the GE capital debacle and to build back the multiple to a neutral position against its group.

Decent industrial but not his favourite. They are really, really big, and when they get that big, it is very hard to outmanoeuvre the rest of the market. They have some good spots and a good disciplined management team and he would expect the dividend to grow.

(Market Call Minute.) Growth is estimated to be about 6% over the next year, not strong growth.

Analysts don’t know where the stock is going. If support broke that would tell you there were problems. You are risking 10% down for 30% up. But if it breaks resistance you have to manage your risk. There is a risk of a correction in the industry at the end of the next quarter.

Has transformed from what it used to be. Credit side needed to get better, big exposure to real estate in Europe. Have done what they can to reduce the credit side. The industrial side, in his opinion, is the best in class. It becomes a bit of a margin expansion story at this point because the stock has had a pretty decent move here. Thinks they can continue to do that. $32-$33 over the next couple of years is not unreasonable.

He looks at this as an industrial stock. The world economy is turning and improving and he likes industrial stocks. Great company. Has had a good move and he thinks it is still going to go higher.