when to buy GE

[GrayHare]

Over the years a "Dogs of the Dow" style of buying individual stocks has done well by me. I'm starting to sniff around GE. I'm tempted to hold off for the "we'll never do it" dividend cut. Any thoughts about at what price GE bottoms?

 

[LiveBelowMeans]

Their debt level scares me. This is not your fathers GE. I would look elsewhere. JMHO

 

[GrayHare]

I like to buy when others are scared. GE could be bottoming now, but it'll take another step down if it cuts the dividend.

 

[marko]

I too was enticed a few weeks ago over the 4%+ dividend but decided to wait n see. Today the world was abuzz over the possibility (likelihood?) of a dividend cut.

Then this article on the subject just came out a few minutes ago, re: ge dividend.
https://realmoney.thestreet.com/art...uld-investors-be-worried?puc=CNBC&cm_ven=CNBC

 

[Clone]

It looks like they turned over a lot of their senior management. A couple of those folks were the make lots of money while destroying your future product kind of guys...

Nothing wrong with making lots of money, but there needs to be some focus beyond the end of the quarter.

I was thinking similar to GrayHare- if the cut the dividend and shock the stock price, I might buy some. It would be the first individual stock in my portfolio in quite a few years. I used to own it back before I grew brains.

 

[bobandsherry]

Is there a right time to catch a falling knife? Dividend is in question, if that gets cut watch out below.

 

[Bigdawg]

Over the years a "Dogs of the Dow" style of buying individual stocks has done well by me. I'm starting to sniff around GE. I'm tempted to hold off for the "we'll never do it" dividend cut. Any thoughts about at what price GE bottoms?

call me. I have been riding it all the way down. As soon as I sell you should buy. That's my luck.

 

[target2019]

For the record...

Date	PPS	Cost		G/L	Shares
5/5/2015	$27.03	$5,411.95		-$798	200.000
10/5/2017	$24.38	$2,446.95		-$140	100.000
10/11/2017	$23.11	$2,319.95		-$13	100.000

 

[Freedom56]

Over the years a "Dogs of the Dow" style of buying individual stocks has done well by me. I'm starting to sniff around GE. I'm tempted to hold off for the "we'll never do it" dividend cut. Any thoughts about at what price GE bottoms?

I own GE Capital Notes maturing in 2018 and 2022 with coupons of of 5.2% and 6.75% respectively. I bought these in 2009 and are rated AA- now versus AA+ when I initially bought them. I prefer buying bonds, notes, and preferred shares of companies verses common shares. Looking back since July 2000 until now, who's better off, the GE bond holders or the GE common stock holders. The answer should be obvious. That being said I would be a buyer for a trading rally in the $19.50-$20 range.

 

[Running_Man]

General Electric is attempting to shrink themselves into greatness. I would never own a company that cut it’s dividend in the last 15 years as that is demonstration of a poorly run company and I need at least 15 year for all that management to work it’s way out of the company before I can even begin to reevaluate a company. It has spent the last 10 years shrinking sales and share counts while spending 60 percent of earnings on dividends. GE needs a rudder and keeps trying to update it’s engine.

If you invest as part of the Dogs of the Dow and this is one part of of a 5 or 10 part strategy of the rot has to be out of the way so I am investing I get it and could see that, but on a stand alone basis I do not like GE

 

[aja8888]

$31 Billion in pension liability

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

Don't forget about the above.

https://www.bloomberg.com/news/arti...angover-immelt-leaves-behind-big-unfunded-tab

 

[Running_Man]

GE could easily pay off the pension liability if they so desired, the dividends paid each year are 8.5 billion dollars in cash, within 4 years the liability could be zero. Likewise bonds are pretty well safe as there is plenty of cash, but it is going to take some shareholder pain to get the company on the right path. But GE is assuming a 7.5 % annual return on a portfolio of 66% stocks, with a 2-3% bond component that is leaving room for further decline in it’s pension funding ratio. And with the past 3 years having no pension contributions and only 1 billion scheduled this year, I would anticipate GE to stay on the same dreadful course they have been on for the past 3-4 years and continue to squander their cash.

Biggest problem has been the sales of company assets to purchase stock back and having the stock price fall, meaning a total waste of company assets. With 467,000 pension holders the impact of another 20-25 percent decline from a bear market in the pension assets would mean an increase of about 50 percent in the pension liability, and the fund would be sitting at about 50 percent funded. This from a fund that was overfunded in 2007, when they said they’d earn 9.5 percent over the long term. (they have earned 5.9 percent average since 2002)

It would be interesting if I could find out how much in pension it pays out each year as the pension liability of 94 billion is only about $20,000 in cash value per pension holder. So that the average pension person is only getting $1,000 per year or 3-5 billion in payments per year? Would like to be able to see their total plan summary.

 

[bobandsherry]

call me. I have been riding it all the way down. As soon as I sell you should buy. That's my luck.

And here I thought it was just my luck. I tired of the lack of progress and unloaded about a month ago, surprisingly it continued to drop rather than rachet back up after I moved out of it. Not hearing anything positive on GE, it's dead to me.

 

[IMATERP]

I own GE Capital Notes maturing in 2018 and 2022 with coupons of of 5.2% and 6.75% respectively. I bought these in 2009 and are rated AA- now versus AA+ when I initially bought them. I prefer buying bonds, notes, and preferred shares of companies verses common shares. Looking back since July 2000 until now, who's better off, the GE bond holders or the GE common stock holders. The answer should be obvious. That being said I would be a buyer for a trading rally in the $19.50-$20 range.

+1 I own those Capital Notes, also.

 

[jazz4cash]

It would be interesting if I could find out how much in pension it pays out each year as the pension liability of 94 billion is only about $20,000 in cash value per pension holder. So that the average pension person is only getting $1,000 per year or 3-5 billion in payments per year? Would like to be able to see their total plan summary.

Maybe we have a GE employee/retiree that could share data from their annual pension summary report. In the meantime I found a site that lists $3.3B in payments in 2016 for 238,000 retirees, so that's about $14k per. This site has pension liability at 71B for 437,000 beneficiaries (including the folks not yet collecting, I think) so that's 152k per beneficiary for a lifetime of payments.

General Electric Has Taken These Steps to Ease Pension Burden - Market Realist

 

[Nemo2]

Don't know when to buy GE, but we just unloaded ours.....luckily the first batch we purchased was settled on July 01/09 and we got them @ $11.75...the balance we lost on.

 

[38Chevy454]

Maybe we have a GE employee/retiree that could share data from their annual pension summary report. In the meantime I found a site that lists $3.3B in payments in 2016 for 238,000 retirees, so that's about $14k per. This site has pension liability at 71B for 437,000 beneficiaries (including the folks not yet collecting, I think) so that's 152k per beneficiary for a lifetime of payments.

General Electric Has Taken These Steps to Ease Pension Burden - Market Realist

I don't have the numbers sheet, since I was several years away and did not pay much attention to them since I was not close to collecting. But recently GE made a buyout offer to the small-time retirees in a certain set of conditions. Basically offer was lump sum Dec 2017, early reduced DBP starting Dec 2017, or stay the course and receive regular DBP at 60 years age (2023 in my case). I only worked for GE for 5 years and it was over 20 years ago, so I had minimum DBP. I was in the group offered the early or lump sum options. I took the lump sum, and will put into my IRA.

My guess is with the nice returns that the GE pension fund should have seen this year, they are getting many of the smaller future pensioners off the books and liability. Administrative savings and a chance to reduce the total number.

How this affects the current stock price No idea, just providing the info about the pension fund somewhat related to the questions above mine.

 

[Running_Man]

And GE announced this morning profits much lower than expected and they are taking a 16 cent per share charge as their continuing efforts on the "Shrink GE Into Greatness" campaign, ---my name for their disjointed, misguided and futile efforts to make the stock market price go up through Corporate Boardroom soundbite moves that look like proper executive actions for your 5 minutes on CNBC while you explain them, which is how GE is managed. It is like an elephant trying to pretend they are a gazelle, saying don't make it so....

 

[Running_Man]

And from an actual financial standpoint the cut they made of projected cashflow to 7 Billion from 14 Billion is huge, I am surprised stock is only down 5 percent....

From a cash standpoint - - they have earned 1.5 billion in cash through 9 months, they claim they will make 5.5 Billion in the fourth qtr, typically their storngest Qtr to reach 7 Billion on the year -- Here is their uses of cash after earnings:

3.7 Billion Stock Buybacks through 9 months 2017 goal was 12 Billion
8.0 Billion -- Annual Dividend payments
1.8 Billion --- Pension Liability Funding
3.0 Billion -- Capital Spending

As one can see, there is a giant hole in the "Shrink yourself into greatness" campaign. I would imagine by early next year the dividend will be cut at least in 1/2 and sharebuybacks will be halted so they can just fund the existing operations. If 7-8 Billion is what GE can generate then they can only afford 3-4 Billion in dividends. Perhaps if things get real bad when stock gets into teens they can issue new shares for funding.

 

[GrayHare]

Getting warmer. The latest EPS drop drives P/E up into the 20s which is too high for a company in this condition. Not buying yet, but slowly getting warmer.

 

[harley]

Thirty years ago.

 

[Totoro]

Returns on capital below 10%, haven't corrected on the dividend and priced at almost a 30 P/E ratio, what's not to like

My impression of GE is that after they nearly blew themselves up being a bank (2009), they still need to reestablish themselves as great builders and engineers.

Would only be interested for a closer look if they dropped another 30% in price, and even then I'd be a bit apprehensive for the longer term.

 

[audreyh1]

their continuing efforts on the "Shrink GE Into Greatness" campaign

Yep - seems like a common US corporate strategy.

Did they announce a stock buyback yet?

Oh, I guess they were already buying back stock before this nasty news came out to hammer their stock price.

 

[Clone]

And GE announced this morning profits much lower than expected and they are taking a 16 cent per share charge as their continuing efforts on the "Shrink GE Into Greatness" campaign, ---my name for their disjointed, misguided and futile efforts to make the stock market price go up through Corporate Boardroom soundbite moves that look like proper executive actions for your 5 minutes on CNBC while you explain them, which is how GE is managed. It is like an elephant trying to pretend they are a gazelle, saying don't make it so....

A couple of those folks were the make lots of money while destroying your future product kind of guys...

Nothing wrong with making lots of money, but there needs to be some focus beyond the end of the quarter.

It is perhaps poor form to quote yourself as a reference...

We used to call this form of management Shrinking yourself into Incredible Profitability.

I think a whole bunch of these CEOs and Board of Director folks were fraternity brothers at the same MBA school. MegaCorp went through a phase of fiscal tightening where we would tear down relatively new buildings to get them off the assets sheet, thus improving our return on assets ratio. The criteria for capital investment required a 12 month pay back on investment. We were outsourcing a lot of production at a higher unit cost (because we could not buy new capital equipment).

Short term, it curtailed a lot of wasteful spending, and the company improved it's profitability. Long term, our production costs went up and some of our customers went away. It took many years to recover from this philosophy.

 

[aja8888]

Will someone please announce when it will be the right time to buy GE again?