General Electric: The Bears Are (Finally) No Longer Running The Show

Jun. 17, 2019 11:21 AM ETGeneral Electric Company (GE)121 Comments
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  • General Electric's stock has performed well so far in 2019, but it is still down by ~23% over the last year.
  • I believe that the bears are no longer running the show, but any serious misstep by management will change this in short order.
  • I am long General Electric, and I plan to stay long through at least 2021.
  • This idea was discussed in more depth with members of my private investing community, Going Long With W.G.. Start your free trial today »

General Electric (NYSE:GE) has a lot to prove to the market before it is able to get out of the dog house, but I believe that the company's new(ish) CEO, Mr. Larry Culp, has been able to greatly improve investor sentiment since taking over in late 2018. To this point, GE shares are significantly outperforming the broader market on a YTD basis.

ChartData by YCharts

The stock is still materially lower than it was 52 weeks ago (down over 23%), but, in my opinion, the narrative for this company/stock has changed (for the better). More specifically, headline risk has played a major role in the movement of GE's stock price for the last two-plus years, but Mr. Culp has finally convinced the market to focus more on the story/data than the noise. It appears that the bears are no longer running the show.

The Bears Are Still Roaring, But Does It Really Matter Anymore?

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In the past, GE's stock price would drop significantly (and would stay down) whenever the company's biggest bear, JPMorgan's Mr. Stephen Tusa, released his reports, but this has not been the case so far in 2019. Mr. Tusa has released at least 5 bearish notes on GE over the last five-plus months, but the stock price has not fallen off a cliff it did in the past. For example, the chart below identifies the date of 4 bearish calls made by Mr. Tusa in 2019.

Source: Chart from Yahoo Finance

As you can tell, the stock has either not traded down or recovered after each of the bearish calls. In 2017 or 2018, GE's stock would sink lower (and would not recover) almost every time a Tusa bearish note was released.

Most recently, Mr. Tusa released another bearish note questioning GE's near-term prospects, while maintaining

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This article was written by

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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, WAB, 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.

Additional disclosure: Disclaimer: This article is not a recommendation to buy or sell any stock mentioned. These are only my personal opinions. Every investor must do his/her own due diligence before making any investment decision.

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