General Electric (GE)

Has been a laggard but is now starting to perform well. Its best divisions are starting to step forward. Company was hurt in recent years by its very, very large financial services division and they are now shrinking this division. However, this division is now starting to pay dividends to the parent company, so he expects the company to continue to raise their dividend.

The financial side of their business really got out of hand through GE Capital but that has been pared back. They sold off non-core assets, their fire and security business and right sized the GE capital business but the company is still sitting in a “show me” type jail cell. This creates some opportunity. There are probably 2 or 3 multiple points that it is trading at a discount to. He is kind of interested in this right here.

(A Top Pick April 19/13. Up 9.67%.) Likes the multi-industrial space. This has a number of different parts to the business on the industrial side. Have been running down their capital side of the business over time.

(Market Call Minute.) Diversified US industrial. Hold this, is a play on the improving US economy.

Their difficulties culminated in 2008 when it was shown that they were not just a pure industrial but really a financial company and a great part of their business was highly levered. Have done a lot of reorganization since then. Have become more streamlined. The market is pricing in the lack of confidence. The multiple is a couple of points below some of the other major US companies, which he feels is the uncertainty. There is an opportunity for organic growth and earnings increases.

Extremely interesting company. Stock has been working higher but FMV is actually not very far away from its present price. However, this is a company that is composed of a considerable number of either 1^st or 2^nd rated company in each of the industries that it is in. Very high quality portfolio inside the GE package. They would be well advised to break up and split the parts out because the component parts would probably be worth double what GE is selling at today.

(Top Pick Apr 19/13, Up 7.86%)

A very solid financing company. Diversified global well run company.

Yield at 3.26%. Likes GE. they have global revenus coming in, and you've got the yield while you wait.

Street has gotten a little bit more comfortable with this name over the last couple of quarters so expectations have ratcheted up. Stock got little ahead of itself as it approached the $25 mark but has dropped back since. The parts of the business that he really likes are functioning. Good balance sheet. Yield of 3.35%.

This is 1 step forward and 2 steps back. Their big problem going into 2008 was the size of GE Capital and got their hand caught in the cookie jar. Have worked hard to pare back that business and consolidate it. He gives them credit for that but they just can’t seem to get everything working together at the same time. Earnings growth is tepid at best. Priced at about 14-15 times earnings. If you own, he would move elsewhere in the industrial space.

Global conglomerate. Financial services part got to be too big and when financial services imploded in the US, it dragged the stock down. It is now less important and they continue to diversify away from financial services. He continues to buy for his new clients. Sees continued upside in the stock and likes the 3.25% dividend yield. Will be raising its dividend on a regular basis.

Great company and with his outlook on the US economy it will do well. Very large part of their business was GE Capital but that is now becoming a smaller and smaller part of it so this will be trading much more as an industrial so you won’t get the huge multiple expansion that they used to have.

(Market Call Minute.) Positive on this. Likes the industrial side. Still viewed as a financial by the market and he is warm to financials.

Very well managed conglomerate. Has been in a quiet restructuring process for 5-6 years and downsizing their GE capital portion. There are other industrials that he would prefer for faster growth. Expect they will raise their dividend this year.