What Big Money Is Doing With General Electric Shares

Aug.24.11 | About: General Electric (GE)

General Electric (NYSE:GE)’s Jeff Immelt made big news when he bought 40,000 shares on March 1. That $844,000 purchase was at $21.10 per share. Unfortunately for those who are long the stock, Immelt’s confidence has not been justified. Shares now trade around $15.50. The Q2 13F filings for big investors recently came out and saw some interesting moves. During the quarter, shares dropped 6.4% while the S&P 500 was flat. Since the end of the quarter, shares have dropped another 17.8%.

The stock may not have been a good buy at the time of Immelt’s purchase, but it does appear to be a good buy now. The stock yields a healthy 3.9%, which is especially nice when government bonds yield so little, and the stock’s multiple is lower than the overall market, suggesting relative upside over the next year. Here are some of the moves from those big investors mentioned above:

Ray Dalio runs the largest hedge fund in the world, Bridgewater Associates. The firm manages about $105 billion. Dalio owned about 2.3 million GE shares at the end of Q2. He increased his position by 480,600 shares during the quarter. GE is his 6th largest position.

On the other side of the trade was another well-known and successful investor, SAC Capital’s Steve Cohen. Cohen sold out nearly all of his position in the quarter, unloading 6.2 million shares. Cohen trades around the position nearly every quarter, and there is a strong chance he’s continued to adjust his holdings in GE since the end of the last quarter. Cohen’s largest disclosed stock position at the end of Q2 was Dendreon (NASDAQ:DNDN). Dendreon shares are down 70% since the end of last quarter.

Mutual Fund manager Bill Miller joined Cohen by selling shares in the last quarter. Miller decreased his GE holdings by about 30% from the first to the second quarter. Miller’s largest current holding is Microsoft (NASDAQ:MSFT).

Ken Fisher bought GE shares in the second quarter, increasing his stake by 14.2 million shares. Fisher currently owns 31.3 million shares. GE makes up 1.5% of his portfolio and is his 11th largest holding. Fisher owns nearly 500 stocks, so his holdings are spread pretty thin. In addition to GE, he also likes Johnson & Johnson (NYSE:JNJ) and Oracle (NYSE:ORCL).

Jim Simons is much more of a trader than an investor. He decreased his position in GE by about 33% in Q2 after selling 2.5 million shares. At the end of Q2 he owned about 5.1 million shares. Like Cohen, it’s entirely possible that Simons has adjusted his GE holdings since then. For example, in Q1 and Q2 2010 Simons bought more than 8 million shares in each quarter. He then sold all of his shares in Q3 2010 before reopening the position in Q1 2011.

Bruce Kovner is the founder of Caxton Associates and runs a hedge fund through the firm. He nearly liquidated his GE holdings in Q2, selling about 750,000 shares. He’s left with only about 150,000 shares, a negligible position. Kovner is also a frenetic trader and holds more than 1,000 stocks. That fact makes his position in Citigroup (NYSE:C) even more notable. It’s his largest holding and makes up about 2.3% of his portfolio.

Finally, Snow Capital’s Richard Snow continues to own a significant stake in GE. The stock currently makes up 2.9% of his portfolio despite selling a small stake in Q2. He trimmed his ownership by about 210,000 shares last quarter and currently owns a little less than 4 million shares. At the end of Q2, GE was Snow’s 11th largest holding. His largest, J.P. Morgan (NYSE:JPM) made up 4.2% of his portfolio.

Disclosure: I am long MSFT.