GE

GE Positioning for Long-term Crude Oil Price Recovery

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Image Source: GE, Baker Hughes Newsletter portfolio holding General Electric has agreed to merge its Oil & Gas business with Baker Hughes. By Kris Rosemann General Electric (GE) is betting big on energy these days, even as orders continue to decline in its ‘Oil & Gas’ segment as a result of continued pressure on energy resource pricing (USO, NGAS). The industrial conglomerate on October 31 agreed to merge the business with energy services giant Baker Hughes (BHI) to create a powerhouse in the sector with estimated $32 billion in annual revenue. Although we’re very cautious on the deal based on the current operating environment and uncertainty in the energy markets–GE is expecting operating income in its Oil & Gas business … Read more

Commodity Price Pressures Dinging Industrial Bellwether Expectations

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By Kris Rosemann Commodity resource prices, while suppressed, are said to be stabilizing, but stabilization at low levels does little good for many operators tied to commodity-based end markets. Such is the case for several industrial giants General Electric (GE), 3M (MMM), and Caterpillar (CAT), all of which have seen their worldwide operations impacted by the effect that a prolonged trough in commodity prices has had on global economic growth, “Industrial Bellwethers Hit by Global Economic Growth Concerns.” We recently highlighted the organic growth pressures industrial bellwether Honeywell (HON) has been experiencing, “Honeywell’s Stock Up 170% Since End of 2009; GE a Better Bet?” and its peers have been echoing its concerns. GE reported third-quarter earnings October 21, and while … Read more

Video: An Overview of Our 16-page Stock Research Reports

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Understanding the Chartered Financial Analyst (CFA) Designation

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“Among the countless finance degrees around the world, the Chartered Financial Analyst qualification has become the gold standard.” – Financial Times, 13 August 2010 “[The] qualification is roughly equivalent to a specialized postgraduate finance degree, including a mixture of economics, ethics, law, and accountancy… Whereas there are tens of thousands of finance degrees available around the world, ranging from the excellent to the worthless, there is only one CFA, managed and examined by an American association of financial professionals, the CFA Institute.” – the Economist From the CFA Institute: “The Chartered Financial Analyst (CFA) charter is an investment credential that, for more than 60 years, has been the global standard for embodying the integrity, dedication, and advanced skills needed to … Read more

Honeywell’s Stock Up 170% Since End of 2009; GE a Better Bet?

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Has Honeywell’s business value truly increased by 170% in less than seven years, or are shares overheated? We think investors should continue to exercise prudence in today’s stretched market. GE may be a better relative bet than Honeywell. By Brian Nelson, CFA What a wonderful ride it has been these past seven years from the March 2009 panic bottom. The S&P 500 (SPY) has experienced one of its strongest showings in history during this time, and even large caps have posted returns that have turned heads. The share price of Honeywell (HON), for one, has leapt more than 170% since the end of 2009, simply a huge run for a company of its size. The question, however, on everyone’s mind: … Read more

Getting the Job Done

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By Brian Nelson, CFA The broader stock market has pretty much gone nowhere (not a technical term) since the spring of 2015, and investors are growing impatient. Well, maybe index investors mostly… Lofty earnings multiples on some of the most well-known stocks, Brexit uncertainty and concerns over systemic risk, emerging-market weakness (particularly in China and Brazil), and the list goes on and on as reasons why the markets have been “stuck” – also not a technical term. Long-term investors may not care, but with the broader S&P 500 (SPY) having tripled since the March 2009 panic bottom, they should at least be paying attention, in my view. After all, a haircut of 10%-20% on broader market prices or more wouldn’t … Read more

3D Printing: Can We Print Some Stability?

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Industrial bellwether and newsletter portfolio holding General Electric’s acquisition of two European 3D printing companies has brought the budding technology back to the fore of investor’s minds. Let’s take a look at some of the major players in the space as well as how the market may develop in coming years. By Kris Rosemann 3D printing may have once seemed like a technology we would only see in a futuristic sci-fi movie, but it is now a reality and has been so for some time. Though it will inevitably revolutionize the $12 trillion global manufacturing market and is one of the highest growth potential areas, plenty of questions remain surrounding the foundation of the industry that continues to be laid, … Read more

Industrial Bellwethers Hit by Global Economic Growth Concerns

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By Kris Rosemann Shares of newsletter portfolios holding General Electric (GE) and its rival Honeywell (HON) took a hit early July 22 after both conglomerates indicated a more difficult operating environment in their second quarter reports. First, let’s address GE. The company has kept the momentum going in its GE Capital exit plan as it has now signed $181 billion in asset sales, completed its de-designation as a significantly important financial institution (SIFI), and closed GE Asset Management. In addition, the firm unloaded its GE Appliances business to Haier for $5.4 billion in the second quarter, a streamlining-oriented removal of a somewhat immaterial portion of GE’s overall business. We like what the progress in its exit plan and de-designation as … Read more

Microsoft With Its Head in the Clouds?

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By Kris Rosemann We couldn’t believe our eyes in mid-June after Microsoft (MSFT) agreed to acquire LinkedIn (LNKD) for more than $26 billion, “What?!?! Microsoft Acquires LinkedIn; NO!” Management must’ve had its head in the clouds. Microsoft remains a 2%+ weighting in the Dividend Growth Newsletter portfolio, more than a double since it was added at ~$26 per share December 2011. Yes, we took some profits several weeks ago (think prudent reduction of outsize exposure within a portfolio context), but we continue to be extremely happy “playing with the house’s money” (a phrase used to describe a big winner where only the raw profits remain with the principal taken “off the table”). While others were snoozing about owning Microsoft in … Read more

GE Continues Transformation; Steady Growth at Honeywell

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Shown: GE’s backlog of unfulfilled orders remains robust, a sign of durability and strength. Image Source: GE’s earnings presentation. We continue to be encouraged by the progress newsletter portfolio holding General Electric (GE) is showing in its GE Capital exit plan. The firm is now ahead of schedule on that plan, having signed $166 billion in asset sales and closed $146 billion of those sales. Its transformation is now ~80% complete, and it continues to pick up momentum in 2016. The company also submitted its application for de-designation as a systematically important financial institution (SIFI) on March 31. However, as GE continues its transformation, which includes the integration of recent acquisition Alstom, its reported results have become quite convoluted as … Read more