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General Electric: The Good, The Bad And The Ugly

March 28, 2018

Summary Points: 

- Will Warren Buffet save the day, again?

- I will highlight three things that investors should be closely monitoring in 2018 - The Good, The Bad, The Ugly.

- I plan to stay long General Electric.

 

General Electric ($GE) is a beaten-up industrial conglomerate that cannot seem to find its footing (and this is putting it lightly), but GE shares jump by over 4% on rumors that Warren Buffett may be interested in initiating a stake in the company.

 

It is hard to cheer for a 4% bump when the company's stock is trailing the performance of the S&P 500 by a wide margin over the last year but anything counts at this point in time.

 

In my opinion, a Buffett investment would go a long way when it comes to investor sentiment. A Buffett buy would be would just what the doctor ordered, but let's not get ahead of ourselves - i.e., investors should not go out and buy GE shares tomorrow on this news, of course, in my opinion. Also, let's remember that Mr. Buffett recently told CNBC's Becky Quick that he would buy GE at the "right number" so it is not like the rumors are coming out of left field.

 

I am [unfortunately] a long-time GE bull so I am obviously encouraged about the Buffett news (when there is smoke, there is usually fire) but, in my opinion, there are other reasons to like the stock around the $13 per share range. To consider GE's current state, I will focus on what I am calling; The Good, The Bad and The Ugly.

 

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