Leonidas
Thinks s/he gets paid by the post
GE's CFO was on CNBC this morning. He painted a rosy picture to say the least.
Highlights were that GE Capital was going to show a profit for Q1, that by reducing the dividend they will save an amount equal to a significant portion of any shortfall they have in GE Capital, and that mark-to-market doesn't really hurt them because they will hang on to the loans they own and they expect the greatest majority of them to be paid off. They did discuss exposure to Eastern Europe but I forgot the specifics. They have some mark-to-market exposure but it's just a small percentage of the total.
One of the hosts asked about analysts ratings and target pricing and he said that he felt it was inaccurate, but that he understood the analysts were under pressure to not raise their guidance easily. The host responded that he had heard from an analyst that GE shares were easily worth $12, but he was not getting any support from his firm for raising his price target.
The CFO said that he felt the biggest drag on share price was a failure on GE's part to provide clarity to what was going on. They're going through their own version of a stress test and the results will be published as part of a GE Capital meeting in the next couple of weeks. He said that if they have to do this every quarter or even every month they might do it because they think once you "dive deep" into the numbers you will see that GE's problems have been overstated and exaggerated.
I think some of it may be true, but I guess we'll have to wait until we see the results of the stress test. A lot of it is probably because they have caught a lot of heat from shareholders over the dividend cut. Plus, I would think it makes sense to try and get ahead of what will no doubt be a downgrade on their paper which is widely anticipated.
Disclosure: I own GE shares but am not planning on selling. Edit: Well, much of my taxable portfolio, including GE, is a potential sale based on the capital gains tax increase that the administration is looking for. Not a lot of capital gains left in that position though!
Highlights were that GE Capital was going to show a profit for Q1, that by reducing the dividend they will save an amount equal to a significant portion of any shortfall they have in GE Capital, and that mark-to-market doesn't really hurt them because they will hang on to the loans they own and they expect the greatest majority of them to be paid off. They did discuss exposure to Eastern Europe but I forgot the specifics. They have some mark-to-market exposure but it's just a small percentage of the total.
One of the hosts asked about analysts ratings and target pricing and he said that he felt it was inaccurate, but that he understood the analysts were under pressure to not raise their guidance easily. The host responded that he had heard from an analyst that GE shares were easily worth $12, but he was not getting any support from his firm for raising his price target.
The CFO said that he felt the biggest drag on share price was a failure on GE's part to provide clarity to what was going on. They're going through their own version of a stress test and the results will be published as part of a GE Capital meeting in the next couple of weeks. He said that if they have to do this every quarter or even every month they might do it because they think once you "dive deep" into the numbers you will see that GE's problems have been overstated and exaggerated.
I think some of it may be true, but I guess we'll have to wait until we see the results of the stress test. A lot of it is probably because they have caught a lot of heat from shareholders over the dividend cut. Plus, I would think it makes sense to try and get ahead of what will no doubt be a downgrade on their paper which is widely anticipated.
Disclosure: I own GE shares but am not planning on selling. Edit: Well, much of my taxable portfolio, including GE, is a potential sale based on the capital gains tax increase that the administration is looking for. Not a lot of capital gains left in that position though!
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