Bad call: Wall Street urged caution as GE shares soared
Filed under: Investing, General Electric
Shares of the Fairfield, Connecticut-based conglomerate have surged more than 66 percent over the past six months, outperforming both the Dow Jones industrial average and the S&P 500 Index. But, surprisingly, I see no evidence that any Wall Street analyst raised their ratings on GE stock, so investors who followed their advice lost out on some sizable gains. None of the research published on GE this year had a buy rating, according to data compiled by AOL Money & Finance.
Analysts, including Richard Totoriello of S&P Equity, were still not ready to tell investors to snap up shares because many unknowns continue to linger at GE. Except for Engergy Infrastructure, all of the company's businesses posted double-digit declines in the most recent quarter. NBC Universal plunged 41 percent.
"Basically, the stock has been underperforming for four years," Totoriello said. "If you took the finance segment away from GE, you would have a much different company."
GE has raised $45 billion from debt sales this year and pre-funded a third of its planned debt issuance for next year, meeting its goal and underscoring the rebound in the credit markets. It has slashed costs by $3 billion during the quarter, and -- according to media sources -- is jettisoning its security business, which may fetch as much as $2 billion.
Still, plenty of challenges remain. Many on Wall Street would prefer to see GE exit the finance and entertainment businesses, something the company has refused to do. However, one investor undeterred by GE's problems is Warren Buffett. The Oracle of Omaha agreed last year to buy $3 billion in preferred shares to help the conglomerate shore-up its balance sheet. Wall Street analysts are still unsure about what may happen next.
The situation with GE highlights one of Buffett's favorite investing maxims: "Be fearful when others are greedy and greedy when others are fearful."
Reader Comments (Page 1 of 4)
8-28-2009 @ 3:07PM
rosslumber said...
I bought GE at $40/Share. It has gone down under Immelt. With MSNBC wild liberal views I would not buy anything made by GE. Boycott GE.
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8-28-2009 @ 4:54PM
Chuck said...
In addition to MSNBC being a one sided liberal media and owned by GE , I have not bought anything GE for years because they make junk. I can see why their stock is down.
Chuck
8-28-2009 @ 3:16PM
James said...
Funny you say that because I bought GE at $9 and feeling quit nice about those liberal views (keep it up MSNBC I love your squawk). Buy GE and don't listen to the fear monger Conservatives!
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8-28-2009 @ 4:25PM
ed said...
i had 3 GE apliances and thru them all out
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8-28-2009 @ 4:30PM
jdn said...
gee, JAMES, havent you heard??????? GE is being investigated for selling remote control modules to a company in Singapore which is known to have close ties with Iran. It seems our Military has found unexploded IEDs in Iraq and Afghanistan and sent these into for examination. And during the examination they found these modules inside these IED'S. These of course are make shift bombs that has been wounding and killing our troops!
James, keep buying GE stock and you might just be funding the manufacture of these devices that are killing our soldiers in Iraq and Afghanistan.... you should be so proud of yourself
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8-29-2009 @ 9:54PM
common sense said...
We have a global economy so goods manufactured by any company will find their way to markets anywhere in the world no matter how we try to restrict them .
8-30-2009 @ 1:37PM
CityLimits said...
If they work as well as some of you say the appliances do, what have you got to worry about?
8-28-2009 @ 4:37PM
Jim said...
On March 4th, 2009, I bought 2000 shares of GE at 6.45 to 6.50. I dont know if Kieth Olberman had any thing to do with the increase but Im sure he helped me out alot more than the idiots at faux news.
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8-28-2009 @ 4:53PM
Itolduso said...
The Obama ship is going down and GE will be along for the ride. I am loving it.
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8-29-2009 @ 1:18PM
Terry said...
Poor old itoldyouso. Boy have you got a rude awakening coming. As I always say. "don,t let the facts get in the way with what you want to believe."
8-28-2009 @ 4:54PM
refuse2lose said...
Funny how the government demanded we all go digital and my amazement when I went looking for a box and GE was plastered everywhere.Now we have the up-coming "cash for appliances".Gee I wonder who is going to make out on that????
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8-28-2009 @ 5:22PM
kevin said...
GE has been around for over one hundred years, and will prolly be around a hundred more.
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8-28-2009 @ 5:25PM
MyKisa said...
...oh but GE will do well under cap n steal bill....government mandated purchases will enhance GE and enslave you for the costs
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8-28-2009 @ 5:40PM
Juan said...
The GE (Module) investigation is still underway and since Imelt is in bed with the Obama administration, I wouldn't be at all surprised if all of a sudden someone in the current admin. will pull ther plug on it and there will never be an indictment. I would not be able to sleep at night knowing that If I bought some GE stocks, somehow funds would be diverted to a company in singapore that are making these modules used in the I.E.D's. I got a question for the GE stock buyers that are bragging about buying GE stocks very cheap, Do you have a father, Mother,brother, Sister ,Son, daughter,Nephew,Niece, cousin, or friend in the military? Could you be able to sleep at night knowing that one of your purchases of so-called cheap GE stock be going to these modules that could kill one of soldiers mentioned in my list above?...Think about it hard, one of these modules could have your name on it ....Is a life of one of our soldiers be worth $6.00 dollars????????
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8-28-2009 @ 8:38PM
Matt said...
Juan,
Have you forgotten who started the war in Iraq?
Bush Cheney and Rumsfeld!
8-28-2009 @ 7:00PM
larry said...
GE WILL PROBABLY DO WELL--THE CEO IS NOTHING MORE THEN AN OBAMA BUTT BOY----------------------------
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8-28-2009 @ 7:24PM
Don Routledge said...
If GE could be salvaged, Jack Welch would be back in the office. Since it cannot be salvaged, Mr. Welch will stay away from GE and his sterling reputation will remain intact. Just don't buy GE. Let them sell their junk to the Muslims. Unpatriotic industrial whores.
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8-28-2009 @ 7:24PM
John Hoover said...
I imagine that quite a few people bought GE as a gesture of repudiation for O'Reily.
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8-28-2009 @ 7:25PM
two2tango22move said...
I AGREE WITH EVERY POSTER WHO CAN'T STAND GE. WE SOLD OUR STOCK. RIGHT NOW IT'S A WHOPPING $14.10 SHARE. GE/IMELT/MSNBC/NBC ARE HOPING TO MAKE A KILLING WITH CAP AND TRADE. HAVEN'T YOU NOTICED OLD T. BOONE PICKENS EVEN HAWKING WINDPOWER ON THESE STATIONS. GE IS A WHORE OF A COMPANY. THEY WILL PAY IN THE END FOR MAKING SO MANY ENEMIES IN THE PUBLIC FOR THE DIRECTION THIS COMPANY HAS TAKEN UNDER THIS CLOWN JEFFREY IMELT.
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8-28-2009 @ 8:02PM
James said...
You CONSERVATIVE MORONS!!!!! GE DOESN'T MAKE THE PART IN QUESTION! Please take a moment from your self righteous life and RESEARCH! Your all so caught up with FIXED news that you forgeot to think for your self!!!! Get your head out of each other's ... a*&es.
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