djasking

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    • Tue Jun 17th 21:54 PM | Rating: 0 0
      Commented on:
      GE: More Bad News to Come?
      Many of the obvious counterpoints are covered in earlier reponses.
      In general the analysis is one dimensional. According to Chris the value of a $57 Billion real estate portfolio is supposed to be infered from the sale of one building which was bought at the peak of the real estate boom. Meanwhile, there is no reason to think GE's historically conservative managers used marks that in any way reflect this boom and bust. The reality of the financial division is that conditions are tough, earnings will be strained, but there has been marked improvement since March regardless of whether a landlord in NY went bankrupt.

      Yes, locomotives face high fuel costs, but meanwhile the rails are going gangbusters as they benefit from the trade-off from truckers. Again, there are ecenomic challenges, but not exactly the nose dive the SP and analysts suggest.

      Yes, indistrials were weak, and this will probably continue, but we are supposed to expect especially dissapointing numbers because management is interested in selling the appliance unit?

      Yes, airlines face serious challenges, but the weakness is exagerated here in the US. The average age of the worldwide fleet is getting up there (don't have the figures in front of me), but weakness in the US harly amounts to a disaster waiting to happen when you see the orders coming from UAE, Korea, China, etc. Another post also pointed out the fact that airlines are trading old gas guzzlers for new efficient models.

      While I understand the motivation for the recent downgrade, they simply didn't see a compelling reason to rate GE outperform anymore (read 1-3 quarters), but for a certain type of investor GE is ideal: strong & safe dividend, poor investor/analyst sentiment, attractive valuation, and ultimately significant value may be unlocked by restructuing the portfolio over the next several years (the obvious step to begin this process is selling industrials to strategic acquirers, the next would likely be spinning off media after piecemealing certain assets).
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    • Fri Mar 21st 20:58 PM | Rating: 0 0
      Commented on:
      Good News from BMO; Write-Down for TD Bank?
      I am not sure I see the argument for an impairment charge on goodwill associated with the purchase of Banknorth. Whether or not the return has met expectations, and it is far too early to tell, the assets have shown no sign of impairment. Impairment charges usually follow significant earnings declines. As for the name change, is that really where the value was centered, or was it the market share, branches, customers, account officers, and portfolio? Finally, as the article points out, goodwill is not included as capital for regulatory purposes, so what effect would an impairment charge really have other than to reduce taxable income and improve cash flow? All goodwill does is acknowledge the fact that the assets wouldn't otherwise trade at the lowly 1x book value.
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