General Electric: Show Me The Way

Summary Points:

- Four companies are showing General Electric's management team what they need to do to create value in 2018/2019.

- After considering the risks, I believe General Electric is still worth a look.

- I'm staying long General Electric.

General Electric ($GE) is a company in turmoil, as this once great industrial conglomerate has had to fend off the bears while at the same time try to reassure investors that the boat is not sinking. To say that the bears have been winning the fight over the last few years would be the understatement of the year because GE shares have underperformed the S&P 500 by a wide margin over this period of time. Consider this - GE shares have underperformed the broader market by ~160 percentage points over the last 10 years.

As a long-term GE shareholder, this chart hurts (more on this below). It has been hard to stay the course with GE over the last 12 months (full disclosure: I sold one-third of my position last month for around $15.50 per share), but I continue to believe that there are reasons to stay long the stock in 2018.

The most significant catalysts for this stock, in my opinion, all revolve around the value that could be unlocked by management by streamlining operations, focusing on the core businesses, and winning over the market (i.e., improving investor sentiment). Yes, easier said than done. However, I believe that there are four companies that are showing GE's management team what needs to be done in order for this storied conglomerate to finally turn the page.