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Comments (36)

Frankija, yes and those two components are engines and large generators. I don't believe the writers of these articles know what the original roots of GE were. The truth is that the genesis of GE was electrical generation and the light bulb. Electrical generation and the use thereof were really synergistic, the more applications that used electricity, the more electricity was needed.
The personnel policies and the emphasis on finance introduced in the Welch era and continued by Immelt until bankruptcy stared him in the face led to a company policy in appliances and other consumer goods of competing on price and not n quality. You couldn't kill the old Ge refridgerators unless you blew them up. The philosophy of the business administration new managers was to see success in the terms they understood, mostly lower price, which finally led to selling the appliances under such names as Kenmore where the GE brand meant less and less. The problem occurred when appliances made off shore with equal quality to the cheaper GE products hit the mass market at lower cost. Now some of those brands sell for more than GE appliances because their quality is better and their support services are better. Still major appliances net more income than the windmill business where demand has to be in encouaged by government subsidy.
To predict the future success of the company, one should analyze the personnel practices and training of their management, how this management is deploying discretionary resources to preserve product advantage and its ability to deal with today's sweep of technology in the markets in which they operate. The are not financial areas only and require analysts to dig deeper than the superficial factors generally portrayed.
falconetti aanthony profile picture
yes I think GE does pay shills to write rainbow articles about GE..

as a long term holder of GE, I am disappointed in Immelt and his crew.

I worked in the corporate world and I can say that if someone recommned buying out another company and then things went sour and the newly acquired company was pretty much shut down ( as with the GE acquisition of Lufkin Industires) some heads would/ should roll..

fact is Immelt - as many others here have noted- has had 15 yrs to make GE better than when he took it over. He has failed miserably..now for those who bought GE after 2008 and got cheap shares ( including me) have done somewhat better..but clearly this group of clowns do not know what they are doing in Fairfield Conn..I am sure they dress up and have meetings and do graphs and charts and have meetings and discuss'issues' but deep down they don't know what in the hell they are doing..they do make enoug money to paint over msitakes..but imgaine what GE could be if someone who was competent ran it..the stock would be $100 share with a $3 /sh dividend and very little debt.

this curly haired 'tard driving now is like a drunk college boy in a ferrari..driiving thru a plowed field.
Ha, just like the hedge funds pay for short side non-sense! Difference is GE make things, develops new technologies, invents, adds value to society vs. hedge funds that are parasite...
Immelt has had 15 years to turn the company around. You should check history and you will find that Immelt continued Welch's policies until the 2008, 2009 debacle. As I recall there were many folks advising him that the company was too involved in GE capital's businesses and that these should be reduced. He did not do anything at the time. An even more damaging Welch era practice of a manager is a manager and the early identification of hipots, rotating them every 2 to 3 years through businesses under short term financial results criteria. He also continued the buying and selling strategy, putting people from GE capital to head newly acquired companies, regardless of the business acquired.
While Immelt has now changed strategies, the company seems to still be reacting to political and outside stimuli, rather than building a strong organic product development process and a competent management team. It still is playing the financial engineering game. The results are big bonuses for the senior management team, but very problematic for the future health of the company.
franklja profile picture
Old Wiz, once again you have described Immelt's (and current GE) modus operando to a "T". Only a couple of GE's industrial businesses have partially escaped the hipot rotation strategy you described above, but I'm afraid they too are having this failed strategy forced onto them. This and the financial engineering game needs to change if GE is to be successful in the future.
It amazes me at the bile constantly posted here against Jeff Immelt. I bought GE at $10 and sold at $20; I have more bought at $15. It is a great company that is heading in the right direction. You don't buy a conglomerate the size and age of GE and expect fast turnarounds and tech style growth. Welch almost destroyed GE with his financial engineering. It is back to its roots and ready for the future.
I have made money on this stock since the crash and have been liquidating shares anytime shares are over 27. Still have a position but do not plan to hold long term. There are better companies for dividend growth and capital appreciation.
Readofsky, I don't know why you single out corporations for not meeting their obligations to employees. It seems to be the standard that most of our federal, state and city governments follow. We now have trillions of dollars of unfounded liabilities for pensions in most of our cities and states and a18 trillion dollar debt at the federal level. Social security is one big Ponzi scheme.
On GE's future in storage, it would be nice if the author knew what exactly it is that gives GE a technical advantage in this area. As far as I know, the long term storage from wind energy is still a problem looking for a solution. I also would like the author to specifically state what developing country has the money besides Chins to pay for all the growth the author sees. In China all that potential is problematic, because it is only a matter of time that the Chinese will produce their own turbines, locomotives and wind turbines. Look at the concessions GE made in the medical and engine arenas in order to sell these products in China. They had to go so far as setting up joint R&D centers and joint venture with a Chinese company which provides engines to the Chinese Air Force,
In the focusing area what exactly is common to medical and the engine business. If you claim that the guts of a jet engine is the same as and ray machine or an MRI or the energy converter in a windmill, I think you need to investigate more. Perhaps you are referring to the customers like the hospitals are the same as the airline manufacturers. In fact, large generators and refrigerators, washing machines and air conditioners may have more in common. Last year by management's own reporting appliances made more net income relative to sales tha windmills, getting back to Ge's roots means what to the author. Getting back to when GE brought good things to life. The light bulb was the first root and GE refridgerators were a staple of most homes that could afford one. This management doesn't know how to run a business that is dynamic, changing rapidly with technology or competition,
With the price this low is GE buying back its stock, with the money their getting from sale of their finacial assets.
Curious why the author has not responded to ANY of the above comments and defend his statements...
Because it was the author's homework assignment most likely. The author has no skin in the game. Why would the author care? The author has nothing to lose unlike us.....
jstratt profile picture
I must ask a few questions

1) Why would people invest in something they dont understand? If you understand GE tell me how much debt of the $315 billion they will carry in 2016?

2) Tell me how much Energy debt they have and wont be able to sell?

3) Tell me how much they will earn on the Oil and Gas industry investments?

4) Tell me how bullish $40 Oil is for GE?

5) Tell me how profitable Alstom will be?

6) Tell me about GE Appliance profits?

7) Tell me why the dividend is frozen if a super bright future is at hand?

8) Tell me why I shouldnt think assets returning 1.69% are overvalued? Is it because you think you would buy assets returning 1%?

Because I dont really know what value GE is right now. Whats worse is Jeff Immelt likely doesnt have a clue either. Personally I think GE pays people to write these articles. GE is a home for dumb money. That is people who dont have a clue about what the true position of GE is.

I could be wrong but I think it is wise to invest in something you understand!
27 Aug. 2015
Lot of naysayers. Hey, it's yielding close to 4% and if that doesn't work for you, move on. I bought some at $7.50 but got cold feet shortly after, and didn't get back in until $21. I'm keeping it long term. I'm patient and am happy with 3.8%.
I know about these things being an IBM retiree...the term "less regulation" sounds good but in reality over the past 25 years companies have shed their real or implied obligations to employees employing politicians to promote "less regulation" in order to allow their corporate sponsors to join the race to the bottom and the destruction of the middle class among other motives. The next time you hear a politician touting elimination of burdensome regulations to spur the economy ask them specifically what regulations they are referring to? In most cases, I believe you will find they refer to regulations intended to ensure that corporations can meet past and future obligations to their employees, preventing systemic risk to the public coffers, slowing down the destruction of the environment by polluters who have no regard for the environment to save them money, and allow loopholes to avoid taxes for the richest subset of the private and corporate economy.
The sour comments above all indicate one thing. GE must be a buy.
I have owned GE since the crash. It initially rose from the $9.00 I paid for it but over the last two years it has not moved and now has frozen its dividend. I have read story after story about how it is posed for a takeoff. Yet in reality it keeps selling billions of dollars worth of the company and I get no money.

Recently bought Emerson Electric. Think it is time to turn my GE into more of that.
falconetti aanthony profile picture
but the author has no position in GE and no plans to buy..the author doesn't have a pot to p*ss in--- just reads the Wall St Journal so people think he is an investor..

pathetic.. put some skin in this pig and then you can write about it.
poordebru profile picture
Wait-GE has taken away pensioners health insurance they promised them, which equates to 3 Billion$ in savings. Now watch for the dividend to be hiked real soon. They know how to make money off of broken promises and the sweat of the old workers that made GE. All American Company!
GE shareholders won't see any higher dividends as a result of cost cuts. (That's already been announced.) But you can be sure than Immelt and all the other GE managers will get substantial raises and bonuses.
03 Jan. 2016
This company is a joke, THERE IS NOTHING of quality here, they buy companies with good products and after a few years everything is gone, the talented people leave the company as soon the new bossed show up bossing around and firing half of the former employees.
This company has been with decreasing revenues for a long time, I don't see how they revert that soon, energy is down due to the price of oil, Healthcare, Hospitals are no buying any thing and with more fierce competition from companies like Samsung with quality products.
Money watchman profile picture

Certainly there is demand for their products. Backlog knocking on $200B, Thats a HUGE number

Jeff Immelt has been cleaning up the mess that Jack Welch left at GE for almost 15 years. I remember seeing Jack Welch on CNBC TV (another misguided purchase so that Jack Welch could do as much hyping as he wanted) during the internet bubble declaring that GE was an internet company while he made loans to companies to finance their purchase of GE equipment which eventually left GE holding the bag for the short term advantage of risky financing of sales and non strategic additions to the company. I actually had my finger on the key to short GE at $57 during the height of the Welch bubble (when GE had a PE ratio of over 40) but am sorry to this day that I didn't push it (after listening to his hyping on CNBC). He left such a mess I am surprised that GE survived. If you look at a long term chart of GE (courtesy of Yahoo finance), you will see the artificial bubble that Welch created and that GE's underlying long term upward trend is actually in tact:


And if you want to read a Forbes article explaining in more detail the mess that Welch left:


I congratulate Jeff Immelt not only for what he has done but for never publicly stating who caused the mess he has had to deal with. Most CEO's would have.

I started buying GE shortly after it bottomed in 2008 and added a bit on Tuesday morning as I believe it is a focused company again with a bright future. I wish I had the same conviction in 2000 when I was about to short the stock at the peak of the Jack Welch created bubble. Age brings wisdom.
Sold off half of my holdings today
I feel like I'm among my people. I thought I was the only one disgusted with the Immelt crew.
Bring Back Jack Welch!
I am going to sell my GE shares soon as my brokers website is up. No more if's or but's I'm tired of losing money. I only wish I'd done it sooner.
Oh yeah- I forgot... It is a slashed,frozen dividend. Waiting for a miracle....
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