Cramer's Stop Trading! GE Brings New Worries to Light (2/6/09)

Stocks discussed on Jim Cramer's Stop Trading! TV Program, Friday February 6.

General Electric (GE), Toll Brothers (TOL), Hovnanian (HOV)

CEO Jeff Immelt of General Electric (parent company of CNBC which broadcasts Cramer’s shows) said that the company would pay out the dividend of 31 cents per share, but cautioned he would “continue to evaluate” the dividend for the second part of 2009 given the “growing uncertainty of the economy." While it is unusual for a CEO to make such a fuss over the future of his company's dividend, Cramer said he did not want to draw conclusions from Immelt’s cautious attitude; “We make a snap judgment on this,” he said, “we’re really not doing the public a good service.”

Cramer thinks the $15,000 tax credit for new homebuyers may be a real lift for the housing sector, especially Toll Brothers. However, Cramer was not so happy with news that Hovnanian CEO Ara Hovnanian’s salary was higher in 2008 than 2007; "Why the heck is he even taking a salary with that kind of annihilation in capital?" said Cramer. "These guys are rich beyond belief!"

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Comments

[donzelion:]

"Cramer thinks the $15,000 tax credit for new homebuyers may be a real lift for the housing sector, especially Toll Brothers..."

Is it a tax credit now, or is it still just a zero interest loan?

Feb 08 06:13 AM

[SJO:]

Hey, it takes a lot of 'hard' work to drive a stock price into the ground!

Feb 08 10:19 AM

[User 185693:]

Mr. Immelt couldn't make this company prosper during the good times since the 2000 down turn. I don't trust him and I'm pulling the plug on my long term investment losses with GE

Feb 08 12:11 PM

[PeteK:]

Cramer is right about GE.
Same with DIS, no good.
Both own News media, so bias nowadays.
Now you know why women hates them.
Some men too.

Feb 08 04:44 PM

[NITRAM:]

JACK WELSH BUILT A GREAT COMPANY. THE ONLY MISTAKE HE MADE WAS TURNING THE COMPANY OVER TO MR. IMMELT. EVEN CRAMER IS NOT DUMB ENOUGH TO VOICE AGAINST THE MAN WHO APAYS HIM. MR IMMELT GUARANTEED THE DIVIDEND FOR THE FULL YEAR. THEN BORROWED MONIES FROM M. BUFFETT AND MY UNCLE. ON A RECENT INTERVIEW ON CNBC(OWNED BY GE) MR IMMELT SPINED EVERY QUESTION. EVEN JOE K. COULDNT BELIEVE HIS NOT ANSWEREING ANY QUESTIONS. THE FACES OF THE THREE PEOPLE ON AT THE TIME SAID IT ALL.. SPIN SPIN SPIN.

Feb 08 06:05 PM

[ex GE'er:]

Earlier on Friday morning Immelt stressed the importance of keeping the dividend, and that GE has more than enough cash flow to pay it. But before the end of the day, he reversed it and said it will be re-evaluated. Talk about a credibility problem?!? This guy is a two-faced liar and essentially incompetent.

Feb 08 07:41 PM

[Urbane Gori...:]

You would probably want whichever provided the bigger bang for the buck..There's no point in having a healthy dividend if the stock price drops. My guess is they'll either have to cut later on anyway, or chose to do so, 'because everyone else is'... jegan




On Feb 08 07:43 AM ED K wrote:

> If you owned 1,602,865 shares of GE,as Mr. Immelt does,would you
> want to see the dividend cut or eliminated?The mind set of Wall Street
> CEOS is GREED and SELF ENHANCEMENT.Shareholde... value and company
> welfare appear to be a secondary concern.
>
> Ara Hovnanian's higher salary in 2008 lends credence to what I've
> said above.In 2005 HOV'S stock price was in the $70 range today it's
> in the sub $2 range.

Feb 08 08:28 PM

[drone:]

I too dumped this dog some time ago along with other dogs BA and PFE. It will be a long time before I look at these stocks again.


On Feb 08 12:11 PM User 185693 wrote:

> Mr. Immelt couldn't make this company prosper during the good times
> since the 2000 down turn. I don't trust him and I'm pulling the plug
> on my long term investment losses with GE

Feb 08 11:16 PM

[Did U Think...:]

People, no intelligent discussion of GE can occur without noting that the fraking company has 523.8 BILLION in debt and a meager 12.3 billion in cash.

In a deflationary crash.

When earnings are tumbling.

And new credit is impossible for indebted companies to acquire.

Do you not understand that GE is the walking dead and will soon need an AIG style bail out??

It's a freaking Ponzi scheme, just like GM. It's a bank. It borrowed short (issued bonds) and lent long (to companies like AMR for jet engines, etc). GE is nothing more than a vendor finance Ponzi scheme and it has been thus since Jack Welch made it into one. GE is just a shadow bank anymore and is destined to BK.

Feb 09 04:36 AM

[Harry Tuttle:]

Is there any good reason why financial companies defend their dividends with such zeal?

Could it be because the people in charge of the dividend policy have large positions of restricted stock?

In case you did not know, restricted stock cannot be sold but does pay quarterly dividends.

Conflict of interest anyone?

By the way, CFC paid a dividend until the bitter end. So did Merrill Lynch. Citi paid $0.16 in November!

Feb 09 03:36 PM

[helplessobs...:]

Mr. Market will have the final say. He says the shadow of a GE dividend cut is passing over the floor of the NYSE. You can take it to the bank - 5 to 15 is the price range as more trouble emerges.

Feb 09 04:23 PM