Buy GE?

[clifp]

More M* stuff on GE

I can understand why GE's short-term holders are dumping with such speed: This is a company that, whatever its other shortcomings, almost never disappoints the Street. But I never forget that as a shareholder, I'm paying for dividends, not earnings (much less earnings estimates). So I offer a few points for those interested in GE to consider:
* Uninterrupted dividend payments since 1899. Two world wars, the Great Depression, the Great Inflation, 18 different presidents--and GE shareholders always got paid.
* Dividend growth averaging 8.9% annually since 1951. For comparison, Consumer Price Index inflation ran at an average of 3.8% per year; nominal U.S. gross domestic product at 6.8%.
* Dividend increases every year since 1976. From 1975 through 2007, the dividend rate rose at 11.7% on average.
* GE stock, which closed today at a yield of 3.87%, hasn't been this cheap relative to its current dividend since 1985 (that is, back when 10-year Treasury bonds offered yields of 10% or more).

Back in Jan when GE was selling for around $34-5, I sold Jun 32.50 puts for $1.50. When it hit $38 a few days ago I figured I'd never get a chance to own it.

Clearly this isn't a home run stock (baring another crazy ass bubble) but %3.87 yield and more than a century of raising dividends at rate considerable above inflation, this is pretty much the classic buy and hold at this price.

 

[al_bundy]

People

GE had a profit and still dropped 10%+ today. Wow people's expectations must be out of whack if a company has similar results to what it had in the past and that is a BAD thing. They made a freak!n profit!

that's not the point

stocks are priced on growth prospects

mid march Jeff Imelt said that GE's earnings estimates for this quarter were "in the bag" so the stock was priced for that level of earnings. then GE comes out and misses earnings by 14% under what was estimated. so the stock fell to reflect the new value of earnings.

Google is also earning a profit and the stock is falling because the rate of growth is slowing. at $700 some dollars the stock is priced for an unsustainable level of growth. now it's more in line with reality.

you can blame RegFD for the volatility. 10 years ago Jeff Imelt would have quietly told wall street about the problems and the stock would have fell over time. now with RegFD you get this insane volatility with a company like GE because the financial industry mispriced the stock because most of the analysts can't do anything other than repeat company guidance.

CNBC tried to play it like it's all bear stearn's fault since the industrial part of the company is growing very nicely. but later on bloomberg they had a chart and most of the business segments are showing double digit earnings growth drops. apparently the credit crisis is hitting medical device sales as well

 

[ladelfina]

Bloomberg.com: Worldwide

It was Immelt who basically blamed the BSC/Fed/credit scenario. CNBC didn't invent that.. but isn't CNBC owned by GE? Wonder if they disclose this when they report on it.

 

[al_bundy]

on friday they had all kinds of warnings how they couldn't talk about the earnings because CNBC owned them but they still snuck a few things in like how the company is doing great because industrial sales are good and how this whole fiasco was because of bear stearns. someone did the math and found the GE earnings shortfall only contributed around $.05 to the shortfall and that the rest is because other business units aren't doing as well.

i don't think Imelt is doing a bad job, but it's more bad timing. Jack Welch built the current GE and most of the businesses are mature.

 

[Hamlet]

Frankly, I prefer the current system. Having wall street brokers able to avoid most of the losses while the small investor still gets the shaft (albeit gradually) is not a good system.

The volatility is good for an investor able to keep their head.

you can blame RegFD for the volatility. 10 years ago Jeff Imelt would have quietly told wall street about the problems and the stock would have fell over time. now with RegFD you get this insane volatility with a company like GE because the financial industry mispriced the stock because most of the analysts can't do anything other than repeat company guidance.

 

[Trapshooter]

Frankly, I prefer the current system. Having wall street brokers able to avoid most of the losses while the small investor still gets the shaft (albeit gradually) is not a good system.

Amen Bro

 

[ladelfina]

the financial industry mispriced the stock because most of the analysts can't do anything other than repeat company guidance.

How do you know "the financial industry mispriced the stock"? GE IS part of 'the financial industry'... maybe "the financial industry" is being too clement. That wouldn't be unusual, to say the least.

 

[al_bundy]

How do you know "the financial industry mispriced the stock"? GE IS part of 'the financial industry'... maybe "the financial industry" is being too clement. That wouldn't be unusual, to say the least.

because if analysts were doing their jobs than they would have been calling customers and everyone else to get a handle on business and the estimates would have been more in line with earnings.

 

[ladelfina]

al.. should we then not trust "the analysts" ever.. or just in GE's case? Or just now? Or just these analysts?

Sorry, don't mean to bust on you in partickular al... but you know what I mean. Especially after the whole 'ratings agency' thing.. I'm just sour on anyone's purported objectivity. Bleh.

 

[al_bundy]

i have access to the reports and read them once in a while but never belive them

you can usually tell if the reports are bogus by how the stock is trending. all the talking heads are saying how good apple and google are and how the stock is really worth more than the current price. but no one can explain why these stocks have lost almost 50% of their value at the trough in the last 52 weeks which is a lot more than a normal correction

and this goes the other way. in an uptrend all the analysts are trying to scare everyone. usually happens in the spring. last few years every year there was an Ipod glut or a denim glut, or an inflation scare in early 2004 or something to cause a 25% correction and then it goes away

 

[brewer12345]

because if analysts were doing their jobs than they would have been calling customers and everyone else to get a handle on business and the estimates would have been more in line with earnings.

So they should have been calling everyone in the known universe to find out how GE's business was going?

The really huge conglomerates are almost impossible to really figure out. All you can do is make a macro bet.

 

[Art G]

Are you on drugs?

21-Feb-08 $ 0.31 Dividend
20-Dec-07 $ 0.31 Dividend
20-Sep-07 $ 0.28 Dividend
21-Jun-07 $ 0.28 Dividend
22-Feb-07 $ 0.28 Dividend
21-Dec-06 $ 0.28 Dividend
21-Sep-06 $ 0.25 Dividend
22-Jun-06 $ 0.25 Dividend
23-Feb-06 $ 0.25 Dividend
22-Dec-05 $ 0.25 Dividend
22-Sep-05 $ 0.22 Dividend
23-Jun-05 $ 0.22 Dividend
24-Feb-05 $ 0.22 Dividend
22-Dec-04 $ 0.22 Dividend
23-Sep-04 $ 0.20 Dividend
24-Jun-04 $ 0.20 Dividend
26-Feb-04 $ 0.20 Dividend
29-Dec-03 $ 0.20 Dividend
25-Sep-03 $ 0.19 Dividend
26-Jun-03 $ 0.19 Dividend
26-Feb-03 $ 0.19 Dividend
27-Dec-02 $ 0.19 Dividend
25-Sep-02 $ 0.18 Dividend
26-Jun-02 $ 0.18 Dividend
27-Feb-02 $ 0.18 Dividend
27-Dec-01 $ 0.18 Dividend
26-Sep-01 $ 0.16 Dividend
5-Jul-01 $ 0.16 Dividend
5-Mar-01 $ 0.16 Dividend
27-Dec-00 $ 0.16 Dividend
29-Sep-00 $ 0.137 Dividend
5-Jul-00 $ 0.137 Dividend
8-May-00 3 : 1 Stock Split
6-Mar-00 $ 0.13667 Dividend
22-Dec-99 $ 0.13667 Dividend
28-Sep-99 $ 0.11667 Dividend
6-Jul-99 $ 0.11667 Dividend
4-Mar-99 $ 0.11667 Dividend
29-Dec-98 $ 0.11667 Dividend
28-Sep-98 $ 0.10 Dividend
6-Jul-98 $ 0.10 Dividend
5-Mar-98 $ 0.10 Dividend

My list didn't show a stock split, and usually it does. Dang it! I can't figure out how to post lists in here without it rearranging them.
My chart does show though that the stock would have made for a nice trade, but to buy and hold didn't make you anything. Up about $2 in 10 years.

 

[al_bundy]

So they should have been calling everyone in the known universe to find out how GE's business was going?

The really huge conglomerates are almost impossible to really figure out. All you can do is make a macro bet.

isn't that what analysts supposed to do? at least some do in the reports i read. some of the big ibanks send their people to taiwan and china to talk to the chip foundaries to get a handle on how nvidia is going to do.

GE Capital might not be that transparent but the other businesses you can follow up on. there is a story floating around that a lot of county hospitals aren't buying new medical equipment due to the ARS thing. to get a handle on the jet engine business all you need to do is check boeing and airbus. for TV check the ratings on NBC. for appliances hit Home Depot on the weekend just like the retail analysts do in the reports i read sometimes. they hit their local mall and comment on traffic.

the real answer is that GE is so big that you don't dare say anything bad about them or you lose a lot of business.

 

[brewer12345]

isn't that what analysts supposed to do? at least some do in the reports i read. some of the big ibanks send their people to taiwan and china to talk to the chip foundaries to get a handle on how nvidia is going to do.

GE Capital might not be that transparent but the other businesses you can follow up on. there is a story floating around that a lot of county hospitals aren't buying new medical equipment due to the ARS thing. to get a handle on the jet engine business all you need to do is check boeing and airbus. for TV check the ratings on NBC. for appliances hit Home Depot on the weekend just like the retail analysts do in the reports i read sometimes. they hit their local mall and comment on traffic.

the real answer is that GE is so big that you don't dare say anything bad about them or you lose a lot of business.

I can tell you have done a lot equity analytical work on the fundamental side, and therefore there is no way to pull the wool over your eyes.

Sheesh.

 

[al_bundy]

and yet a reporter of all people, Herb Greenberg has made more right calls about companies in the last few years than most analysts

off topic in this thread, but in the last 2 weeks or so MBIA and Ambac have lost their top bond ratings. except for a few sites, the financial media has been very quiet about this considering the hype they raised during the last sucker rally we just had

learned the hard way not to trust CNBC and pretty much every financial publication out there, and the anaylsts. very few analysts in the last few years made some right calls to give investors warnings before a company blows up. you can still see it in the ratio of buy to sell ratings on companies.

 

[brewer12345]

and yet a reporter of all people, Herb Greenberg has made more right calls about companies in the last few years than most analysts

Next you will be singing Cramer's praises.

 

[Hamlet]

I like to listen to Herb because he's pretty good about sniffing out all of the possible negatives to owning a stock.

Since most of his sources are short sellers, he tends to have a gloomy outlook.

Boy do people get angry with him when he points out problems with their favorite high-flying "story" stocks.

and yet a reporter of all people, Herb Greenberg has made more right calls about companies in the last few years than most analysts

off topic in this thread, but in the last 2 weeks or so MBIA and Ambac have lost their top bond ratings. except for a few sites, the financial media has been very quiet about this considering the hype they raised during the last sucker rally we just had

learned the hard way not to trust CNBC and pretty much every financial publication out there, and the anaylsts. very few analysts in the last few years made some right calls to give investors warnings before a company blows up. you can still see it in the ratio of buy to sell ratings on companies.

 

[Trek]

Good to get into GE now at $28 for a very long term hold?

 

[Dawg52]

Good to get into GE now at $28 for a very long term hold?

I own it. 4.5% dividend pretty good. You should probably short it.

 

[Rambler]

I got in, a few traunches over the past few days and some a few months back at higher prices...holding on for the dividends, 4.5% now.

 

[flatrock]

Originally Posted by Trek
Good to get into GE now at $28 for a very long term hold?



I recently bought 4200 shares between 26.53 and 28 inside my 401K. Im in the black right now. Plan to hold & reinvest dividends for 15 yrs. Then transfer all out using the IRS NUA rules to qualify for capital gains if I should need cash but my plan is to turn on the dividend stream to supplement other income. 50 year dividend growth rate is 8%. In their mideast deal today the sheiks are required to buy a min 10% stake of outstanding common stock or 3.2 billion at todays price. Speculation is this will put in a "floor" to keep the share price from dropping more. Im basically gambling and I am not a financial expert. I have been buying & selling GE stock off & on for 15 years and I just think there is alot more upside room than downside than I have seen in a long time.