GE may need radical cuts to boost its stock, analyst says

|By:, SA News Editor

Barclays analyst Scott Davis comes up with a new benchmark for evaluating investor interest in GE: He says 80% of phone calls he received when he began covering GE in 2002 were requests for info about the company, while today the number is barely 5%.

For the phone to start ringing more often, Davis thinks GE needs to make bolder decisions and move aggressively to trim its portfolio of businesses, suggesting the company get out of banking, appliances, data centers or any other non-core, non-infrastructure based business.

Interest in other conglomerates also has faded, Davis says, concluding that the model of extreme corporate diversity no longer makes sense for investors who can spread risks around on their own via ETFs or other instruments.