CaptainJJack

GE: Buy on Valuation

I like GE, too, but at 13 times or less, not 17 times. I like the industrial businesses, but I have never liked the NBC or finance businesses.

I think the earnings history is not very useful. Although I am clearly speculating, I believe that Welch used to "manage" earnings through the finance arm (especially when they owned Genworth), and they often made their numbers by selling things, especially the real estate investments.

Immelt does not have those options, and he is at least making an effort to rein in the cowboys at GE finance. Still, with consensus at around $1/share next year, the stock seems fully valued.

Then, too, the dividend has been cut by two thirds.

So, I like GE long term, but given the business GE is in, I think that the stock price will face a lot of hills and valleys, and I can wait