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Old 10-26-2017, 09:49 PM   #41
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Old 11-02-2017, 11:52 AM   #42
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Broke through support at $20 this morning, it tried doing a chin-up to $20 again but couldn't hold. $18 is possibility on this. And strangely a dividend cut may be a signal for people to buy back in.
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Old 11-02-2017, 01:38 PM   #43
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Broke through support at $20 this morning, it tried doing a chin-up to $20 again but couldn't hold. $18 is possibility on this. And strangely a dividend cut may be a signal for people to buy back in.
If the dividend is cut, it will be a $11-12 stock. The 2018 estimates are $1.15 vs $1.07 for 2017. At current prices GE is not a bargain. I expect to see this stock down to $15 in December.
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Old 11-13-2017, 09:23 AM   #44
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The dividend is cut, in the announcement the new CEO promised a return to greatness by reducing the company to 3 main areas of business and exiting all other businesses. Also in cutting the dividend in 1/2 they promised improved shareholder performance and in lowering the forecast for the coming year promised making targets is a key objective going forward. Sometimes reality is the best comedy....
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Old 11-13-2017, 10:06 AM   #45
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Down nearly 5% this AM
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Old 11-13-2017, 10:25 AM   #46
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I see it just dropped down below my $19.50 buy price, so I guess I own a few hundred more shares GE stock now. It's in my Roth IRA gambling account, so it's not an impact on our net worth. Now I'll have to figure out a sell point and set a limit order. Then forget about it and check back in a year or two and see what happened.
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Old 11-13-2017, 10:27 AM   #47
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Not there yet IMO but that's a step closer to the time-to-buy.
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Old 11-13-2017, 01:44 PM   #48
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Not there yet IMO but that's a step closer to the time-to-buy.
But does a lower dividend change your calculation?
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Old 11-13-2017, 03:01 PM   #49
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But does a lower dividend change your calculation?
No, since I'm looking for growth and have expected GE to bottom shortly after this dividend cut. My limit order to buy is in.
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Old 11-13-2017, 03:32 PM   #50
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No, since I'm looking for growth and have expected GE to bottom shortly after this dividend cut. My limit order to buy is in.
This is an interesting comment, what growth can be seen for GE when the CEO says they will have negative growth. If you mean value of the underlying assets perhaps I could understand that but there will be no growth in financial performance for a couple of years.

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In addition, the company said it will "address overcapacity" and simplify its portfolio. While it slashed its dividend in half, the company also set a $3 billion share buyback priority. Addressing its pension plan shortfalls, Flannery said the company will borrow $6 billion to take advantage of the current rate environment.

The board of directors will be reduced from 18 to 12, with three new members slated "with relevant industry experience." Directors will have 15-year term limits.

"We have not performed well for our owners," Flannery said. "This is unacceptable, and the management team is completely devoted to doing what it takes to correct that."

Employee bonuses also will be restructured, with elimination of the three-year cash long-term performance awards and a switch to a program that conforms to "market norms."

The dividend allocation will be $4.2 billion for 2018, pushing it from above 100 percent of free cash flow to 60 percent to 70 percent,
Let’s look at what they are saying: we will have 6-7 billion of cash flow, 4.2 billion will be for dividends and 3 billion for share buybacks, meaning they will utilize 100% of cash flow for those two financial gerrymandering which does zero for growth of the business. Additionally they will BORROW to pay their pension expenses, note one could also look and say they are borrowing to pay their dividend, but semantically let’s give them a break. They will be exiting businesses and have overcapacity issues.

How is this ANY different than what they have done for the past years, it is not, it is a downsizing of the previous strategy because cash flow has been cut in half and for anyone looking for this to work you are praying a subpar management team can find value with no funds with which to fix the actual business, a recipe for disaster. While GE as a business is probably worth 15-18 per share with this plan it would need to be near 12 to be a decent value because management is slowly destroying all it’s money making revenues by increasing debt while shrinking assets
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Old 11-13-2017, 03:53 PM   #51
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I don't think GE is going to zero, so I expect it to turn. If I can buy low and the turnaround takes years that's fine by me. "Dogs of the Dow" has been a winning strategy for me in the past.
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Old 11-13-2017, 03:55 PM   #52
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I bought 950 shares at 19.10 today in a traditional IRA that I can't seem to get converted to a Roth in anticipation of selling 950 shares 15 Dec in my taxable accounts to create a tax loss.
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Old 11-13-2017, 08:27 PM   #53
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Well ok on the buying, with the cut of forecasted results by 1 billion in just 4 weeks from the earnings announcement or about 15%, which came after a 50% cut in anticipated results. The dividend cut in 1/2 is what I expected with 7-8 billion of cash generation but if these results continue into next year the dividend will need to be cut a further 25%. I expect GE to trade under 15. Much will depend on the final results of this quarter for trading results into the new year.

On the upside you have Cramer after years of plugging for GE admitting today that GE was the single worst investment he has ever made.
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Old 11-13-2017, 11:42 PM   #54
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On the upside you have Cramer after years of plugging for GE admitting today that GE was the single worst investment he has ever made.
Wow...that is saying a lot right there LOL
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Old 11-13-2017, 11:51 PM   #55
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On the upside you have Cramer after years of plugging for GE admitting today that GE was the single worst investment he has ever made.
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Wow...that is saying a lot right there LOL
I'm not sure that's true, though. I'm not a Cramer watcher, but I had a friend that worked for Bear Stearns, and I remember him telling me (just before the crash) that Cramer was insisting BS was solvent and not to sell. Of course, maybe that was just (horribly bad) advice, and not a personal investment. But how bad GE is as an investment depends on when you bought it. My original purchase in around '96 at ~$15-$16 dollars has been pretty good. 20 years of dividends and it's (currently) worth more than I paid.
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Old 11-14-2017, 03:29 AM   #56
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My MIL’s portfolio (which I manage) has several thousand GE shares with a cost of about $6. At this point I think we will just hold it.
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Old 11-14-2017, 04:24 AM   #57
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So, if GE is busted up, what is the valuation of its assets (real property, intellectual property, etc.). Can't think of the term: liquidation price?

How close is the current stock price to that range?
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Old 11-14-2017, 06:51 AM   #58
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So, if GE is busted up, what is the valuation of its assets (real property, intellectual property, etc.). Can't think of the term: liquidation price?

How close is the current stock price to that range?
Book value of GE is around $9. In 2014 it was $14. GE basically sells for 2X book. Every asset they sell needs to sell for more than 2X book after tax in order to be favorable to shareholders. They have been unable to do so.

This is the problem with their strategy of a turnaround, with the money from asset sales they buy shares and pay dividends. The strategy is a liquidation strategy and has been so since 2011, they have spent about 35 billion buying shares back. GE also retired shares in exchange for purging themselves of Synchrony financial. This meant GE retired 670 million shares of stock in exchange for a division in 2015. Since then GE share price has fallen 33% while Synchrony has risen 50%. On the 18 Billion the stock was worth at the time GE has now lost 6 billion investing in themselves - without reporting a dime paid for stock while Synchrony increased by 9 Billion. And that money is gone for GE shareholders, they are now borrowing just to be able to have maintenance capital for remaining divisions. They also have lost an additional 12 Billion in enterprise value on share buybacks while the pension debt has soared by 32 billion.

This is not a CAT situation where CAT was in the midst of a downturn and had invested heavily in themselves and didn’t get the results expected. See the CAT thread from a couple years ago for a true Dogs of the Dow situation. This is the opposite, shrinking productive assets in hopes of clarity because apparently management doesn’t know how to manage current asset base…DUH!

They borrow for capital investment and pension expense which is becoming an albatross around their neck. You end up with a gradually smaller company with less revenues and more debt, hence less valuable and share price and enterprise value falling faster than share count— hence a destruction of value less the distribution of assets via dividend, the dividend the past few years and apparently going forward is a slow liquidation dividend. In the last 5 years you have about $5 in dividends, $11 in share price reduction and $5 in book value reduction. Going forward the path should be about $3 in dividends over the next 6 years and $6 in share price destruction along with another $2 in book value reduction yielding a stock around $12-13 and book value of $6-7. No thank you. Any five-seven year bond though should be perfectly safe as financing will continue to be able to make all the debt payments at the time.

Remember all those annoying commercials about GE being a software company and needing those new high tech grads? Was a big push for the modernization of GE… this is one of the main divisions being downsized because their software of the future division has been a disaster

Furthermore, this thread was started as if GE was a Dogs of the Dow candidate. It is not.. the dividend is just average now it’s dividend is about the same now as JNJ and almost certain to be cut again, unless corporate performance turns around rapidly. And when GE is pushed out of the Dow index in 2019 which I think is a near certainty with their continued shrinking focus as no longer a relevant company does that strategy still hold?
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Old 11-14-2017, 10:30 AM   #59
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So, if GE is busted up, what is the valuation of its assets (real property, intellectual property, etc.). Can't think of the term: liquidation price?

How close is the current stock price to that range?
That outcome is not even remotely possible. If GE were to be broken up, an extremely unlikely outcome, then the separate businesses would be marketed as going concerns.

Ha
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Old 11-14-2017, 01:08 PM   #60
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Buy now. It is in the Total US Stock Market index fund. I buy that monthly. So I am buying GE and all the others. It is in there. I don't buy individual stocks.
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