Thursday, April 15, 2010

General Electric Investors Look Past Finance Rut for Stabilization (GE)

Long time readers know of our disdain for Jeff Immelt and his management of GE.
But that shouldn't deter anyone from making a few bucks off the stock. We've been cheerleading for a month now, here's some more, from Bloomberg:
General Electric Co. investors say profit declines may be easing, allowing them to look beyond the slump for signs that Chief Executive Officer Jeffrey Immelt is stabilizing the finance unit and driving industrial orders.

GE, the world’s biggest maker of jet engines, power-plant turbines and medical-imaging equipment, may say tomorrow that profit from continuing operations fell to 16 cents a share from 26 cents a year earlier, analysts estimate.

Earnings may improve enough later in the year that GE can raise its dividend in 2011, the Fairfield, Connecticut-based company said in March. The prospect has lifted GE to the highest since the midst of the U.S. financial crisis 18 months ago.

“They may actually surprise on the upside with real revenue growth here, and the comparisons are kind of easy,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati who helps handle $12.8 billion, including more than 2.1 million GE shares as of March 31. “Any little surprises on, say like energy systems, that’s the kind of thing that people are going to latch onto and say, ‘Hey, the big kids are back in town.’”

GE may be poised to show investors steadily improving profit margins, cash generation and order growth amid a buffer of free cash that the company has predicted to be about $25 billion at the end of 2010, said Steven Winoker, an analyst with Sanford C. Bernstein & Co.

GE may see one more quarter of declining earnings before profits start to climb against year-earlier comparisons in the second half, analysts surveyed by Bloomberg estimate.

‘Sum of the Parts’

“They certainly have problems, but if you look at the sum of the parts, the sum of the parts of GE is so much more,” Michael Yoshikami, president of Walnut Creek, California-based YCMNet Advisors Inc., told Bloomberg television. The firm owned 1.23 million GE shares at the end of December. “They’ve just really been beaten down because of the financial services.”

GE averaged about $16.61 on the New York Stock Exchange in the first quarter, up 47 percent from the year-earlier period. Shares rose 15 cents to $19.50 at 9:55 a.m. after closing yesterday at $19.35, the highest since November 2008, though still about $7 less than when the financial crisis toppled Lehman Brothers Holdings Inc. in mid-September 2008....MORE


Mar 24 "Bernstein on GE: Stock is Going to $20" (GE)

Mar 18
"A Longtime GE Bear Stops Growling" "General Electric's Valuation May Get a Boost" (GE)

Mar 17
More on JP Morgan's General Electric Comments (GE)

Mar 17
General Electric Instanalysis: Breakout (GE) and some Options Commentary

Mar 17
"Goldman on GE: ‘Momentum Should Continue to Build’" (JP Morgan Concurs) GE

Mar 15
Goldman Sachs Sees Further Momentum In General Electric (GE)

Here's the stock action:

..This is a breakout, look at the volume increase on the upticks. From BigCharts: