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Insiders have been buying shares of General Electric (NYSE:GE) over the past few months. Approximately $3.5 million have been purchased since October 2006 at about the current trading price of $36. Notably Warren Buffett purchased 7.7 million shares roughly a year ago in the $33 range. This may signal a buying opportunity for the patient investor.

Looking at a 5 year chart the stock has basically been flat while earning have grown about 10% over the past couple of years. GE should be able to maintain at least a 10% earnings growth rate over the next 5 years. The company's forward p/e is 16.2 which appears quite cheap historically. Considering GE's competitive position to its peers and strong management, the company should realistically trade at a p/e of 20-22.

A 20 p/e times earnings estimates of 2.22 for 2007 equals a $44 stocks price. Add in the 3% dividend yield and you could expect a 25% return within a year. GE isn't going to make you sky-high returns based on the company's enormous size but it may turn out to be an excellent investment considering the risk/reward.

I do not own shares of GE.

GE 5-yr chart:

Source: Pay Attention to Insider Buying at GE