GE

General Electric Is in the Bargain Bin; CEO Jeff Immelt Agrees

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General Electric (GE) has been in the news quite a bit as of late. The industrial and finance conglomerate reported fantastic fourth-quarter results January 17 that revealed significant order and backlog expansion (two indicators of future financial performance). The fundamental momentum the company has shown recently with respect to its industrial operations is undeniable. The company is also making the right moves with its financial operations. Having suffered through a dividend cut during the financial crisis, GE is now wisely seeking to shed (in an initial public offering) the reason why it was forced to slash its dividend payout years ago, its consumer financial services company (to be named Synchrony Financial). Synchrony isn’t all of GECC–GE currently owns 100% of … Read more

Thank you…

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By Brian Nelson, CFA Earlier this week, I received an email from a colleague and valued member of our services. I wanted to share it here for others to read. I haven’t included his name, but if he wants me to, I can add it in. It is filled with wisdom, experience and kindness. And it really made my year to read his words. The Valuentum community, I believe, is the best community of investors out there. Sir, if you do happen to read your own email on our site, we very much have appreciated your feedback, and we hope to continue to live up to your praises. We are dedicated, and our team has been rejuvenated by your words. … Read more

What If You Joined Valuentum on January 1, 2013 and Followed Our Transaction Alert Emails…

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Let’s get this out of the way first: we’re not perfect. Though investors can look at our track record over a longer horizon to great satisfaction, as the Best Ideas portfolio (click here) and Dividend Growth portfolio (click here) are doing quite well for long-time members, what about new members that may have joined recently? How would they have fared by following our transaction alert emails? Would they have made money on our ideas? Before we answer these questions, let’s walk through a few ways members use our services. Many like to replicate the actively-managed portfolios that are housed in the monthly newsletters in their personal accounts in their entirety. Others like to use our transaction alert emails for incremental … Read more

GE’s Fourth Quarter Results Were Excellent

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On Friday, GE (GE) reported excellent fourth-quarter results that showed robust order and backlog growth. The company’s revenue nudged 3% higher in the period as industrial sales advanced 6% (5% organic) offset in part by an expected decline in revenue from its finance arm, GE Capital. Industrial segment profit jumped 12%, with six of seven segments growing earnings. The conglomerate’s industrial segment margins during the period advanced an impressive 100 basis points, to 18.3%. Fourth-quarter operating earnings per share leapt 20%, to $0.53. GE’s cash flow performance continues to be top-notch, with full-year cash from GE operating activities (CFOA) coming in at $17.4 billion. GE’s infrastructure orders for the fourth quarter leapt 8%, ‘growth market’ orders increased 13%, and expansion … Read more

The Best Ideas for 2014 and Beyond: Part II

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A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Tweeting on Thursday

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Thursday was jam-packed with news. Let’s jump to an abbreviated ‘Valuentum Take’ on each major news item in the spirit of Twitter’s (TWTR) 140 character limit. We don’t intend to do this too frequently, but we wanted to get our take out there in a timely fashion. We’re available for any questions. Tweeting on Thursday AK Steel $AKS issues strong outlook, but #steel industry far from attractive, among the worst in our coverage. Tibco $TIBX issues poor outlook, while Red Hat $RHT exceeds expectations, puts up strong billings growth; both firms fairly valued. Linn Energy $LINE back on track as SEC endorsement improves sentiment; we prefer $KMP and $ETP in DG portfolio. Darden $DRI to part with Red Lobster; core … Read more

The Dichotomy of Airlines and Aerospace

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On Monday, top insurance idea AIG (AIG) announced that it would sell International Lease Finance Corporation (ILFC) to aircraft leasing firm AerCap Holdings (AER) for $5.4 billion, consisting of $3 billion in cash and the balance in newly-issued AerCap common shares. Though we think ILFC was one of the crown jewels of AIG’s business particularly considering the prospects for global air travel demand in coming years, the price is fair and opportunistic, especially since AerCap is risking its investment-grade status to facilitate the deal. We don’t think better terms could have been had by either party, given financial constraints, and shares of both entities are moving higher on the news. The combined AerCap-ILFC will be #2 on the world stage … Read more

Industrial Conglomerates Dominate News on Friday

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The latter part of this week brought about a plethora of news from the ‘Industrial Conglomerates’ industry. On Friday, General Electric (GE) announced a 16% increase to its quarterly dividend to $0.22 per share (a 3.3% annual yield). The industrial behemoth was just added to the portfolio of our Dividend Growth Newsletter October 21 on account of its fantastic Dividend Cushion score and solid third-quarter performance. General Electric’s dividend report will be updated with the new information shortly. Also on Friday, Honeywell (HON) approved an authorization to repurchase up to $5 billion of its common stock, now that the firm’s previous $3 billion share repurchase program approved in 2011 is substantially complete. We encourage Honeywell management to be a bit … Read more