General Electric: A Fixable Company And Situation

Oct. 08, 2018 1:43 PM ETGeneral Electric Company (GE)51 Comments
WG Investment Research profile picture
WG Investment Research


  • The stock is up big since General Electric announced its CEO change.
  • The struggles of the Power unit and the company's poor financial position have caused downward pressure for the stock but, in my opinion, General Electric is a fixable company.
  • I plan to stay long General Electric. What do you plan to do?
  • Looking for a portfolio of ideas like this one? Members of Going Long With W.G. get exclusive access to our model portfolio. Start your free trial today »

Long suffering General Electric (NYSE:GE) shareholders have enjoyed a nice ride since the company announced that Mr. Larry Culp, the former CEO of Danaher Corp, would replace Mr. John Flannery as CEO.

GE Price data by YCharts

While shares are up big in such a short period of time, I still believe that the risk is currently to the upside, of course, over the long-term — that is, most of the bad news is already priced into the stock, in my opinion, so a string of positive developments would likely result in a significantly higher stock price. There are definitely risks that need to be considered/evaluated (will be discussed below), but I believe GE shares at the current level are attractively priced. Moreover, Mr. Culp appears to be the right guy for the position and he without a doubt has a proven track record but, in my opinion, it is somewhat easy today to overlook the fact that whoever is leading this industrial conglomerate has some great businesses to work with.

A Strong Portfolio Of Businesses

General Electric is a well-diversified company that has strong businesses in several key industries that have promising long-term prospects.

The company will, however, look very different after the following transactions are finalized:

  • The Lighting unit is currently being shopped around and I expect for the business to be offloaded at some point in the near future.
  • The company entered into a unique deal to merge its Transportation unit with Wabtec (WAB) to create a new publicly traded entity.
  • The Healthcare unit spinoff is expected to close in 2019.
  • The idea of selling or spinning off the majority stake in Baker Hughes, A GE Company (BHGE) has been floated.
  • The company has expressed their intent to further reduce GE Capital's business in the years ahead.

This article was written by

WG Investment Research profile picture
Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long GE, BHGE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (51)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.