when to buy GE

[copyright1997reloaded]

I guess he was waiting for $13 instead of the $8 in this thread.

Doubtful. He typically makes a deal that isn't just common stock (and thus low on the list in terms of bankruptcy protection). For example, when he did the $5B investment in Goldman Sachs (GS):
1) $5B in GS perpetual preferred with a 10% dividend rate
2) plus warrants for $4.3B of GS stock @ $115/share, exp 10/1/13. This is essentially an option.
GS had the rights to buy back the preferred, with a $500 million extra to buy back early (which they did)

On the warrants, GS and Buffet later made a deal to issue Buffet 10 million shares of GS stock (which would now be worth almost 2.5 B today) in exchange for the warrants.

So, if you think you are getting the same deal as he is (assuming he is really investing in GE), well....

 

[Car-Guy]

So what do "the experts" (or reasonably knowledgeable) folks around here say about GE now? I was buying/dollar cost averaging "out of favor" big oil (XOM) in the lower to mid 70's just a few months ago and recently sold it all in the lower 80's.


I am wondering if GE may offer a similar opportunity now in the mid 13's over the next 6 to 12 months?

 

[courtjustshan]

So what do "the experts" (or reasonably knowledgeable) folks around here say about GE now? I was buying/dollar cost averaging "out of favor" big oil (XOM) in the lower to mid 70's just a few months ago and recently sold it all in the lower 80's.


I am wondering if GE may offer a similar opportunity now in the mid 13's over the next 6 to 12 months?

I bought GE at 13 back in April, sold at just under 15 last month. I'll probably load up again and look for another 10-12%. I believe there is enough emotion on the stock to continue these mini runs for awhile.

I also believe as the other posters have pointed out that they have a mountain of debt, and equally importantly, they seem to have lost their way in terms of innovation. I worked for GE for awhile back in the 80's, they had just sold the consumer electronics business and were moving in medical agressively. I just don't see a strategy that makes sense. A real shame.

 

[Machine99]

Anyone else contemplating buying yet? Not looking for short-term gains, but 10 yrs or so.

 

[Dash man]

Not even on my radar. I don’t like trying to catch a falling knife.

 

[Running_Man]

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.

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?

And now GE is no longer in the Dow Jones Industrial Index as of next week, replaced by Walgreens as of

 

[audreyh1]

Wow!

 

[Hamlet]

Anyone else contemplating buying yet? Not looking for short-term gains, but 10 yrs or so.

Nope. Every time I take a look at their financial reports, my head starts to hurt before I get through them. They are just too complicated and highly leveraged for me to be comfortable owning them. I can't value them. They could be worth 50 or zero.

Now that some of the consumer staple companies have rational valuations again I'm not really interested in trying to puzzle out GE.