General Electric: This Is What Matters, For Now

Jul. 29, 2019 3:46 PM ETGeneral Electric Company (GE)31 Comments
WG Investment Research profile picture
WG Investment Research


  • General Electric is scheduled to release Q2 2019 results on July 31, 2019.
  • I cover the two things that investors should closely monitor this week (and for the rest of the year).
  • I am long General Electric, and I plan to stay long the stock.
  • 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 been a battleground stock that has actually performed extremely well so far in 2019 (up over 38%). However, GE shares are still down almost 20% over the last year and have significantly underperformed the broader market.

ChartData by YCharts

2019 has been a good year for GE shareholders, but the company's management team still has a lot more to prove before the stock will be able to tick higher from here. To do this, management will need to continue to tell a good story, and the company's operating results for the next few quarters will need to impress. To this point, I believe that there are 2 things that investors should pay close attention to when GE reports on July 31, 2019.

The Two Things That Matter, For Now

There are too many moving pieces to get good read-throughs when it comes to GE's top- and bottom-line results. So, while these are important metrics, I believe that there are 2 things that should be front of mind - i.e., debt levels and margins.


GE having a subpar balance sheet wrecked major havoc as the company simply could not weather the storms that were caused by the downturn in the Power industry. Actually, the last 3 plus years have turned out to be a perfect storm (Oil and Gas downturn, SEC/DOJ investigations, the Alstom "disaster", pension charges, and the insurance reserve issues), so it was not only the struggling Power unit that negatively impacted GE's business. However, it should also be noted that some (if not most) of these factors were self-inflicted wounds.

As a direct result of these factors, in addition to the already deteriorating balance sheet, management had to make some extremely difficult decisions which consisted of spinning off/selling assets, restructuring, and basically eliminating the dividend.

ChartData by YCharts

If you enjoyed our stock coverage, please consider joining the Going Long With W.G. marketplace service. We cover at least one new small-cap company each month and we regularly update our thoughts on past recommendations. Additionally, subscribers have access to a Live Chat feature that allows for one-on-one and/or group conversations. *Start your free trial today*

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, HON. 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: 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.

Recommended For You

Comments (31)

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.