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This Is How General Electric Is Positioned, Financially - And Yes, Cash Is A Concern

March 8, 2019

Summary:

- General Electric recently provided its industrial cash flow guidance for 2019 and the news was not well-received by the market.

- I took a look at how General Electric is financially positioned and, in my opinion, the balance sheet concerns are somewhat overblown. However, the cash flow guidance does not help.

- I am long General Electric and I plan to stay long the stock.

 

General Electric's ($GE) stock has performed well so far in 2019, as the company's newish CEO, Mr. Larry Culp, has been able to change the narrative for this troubled industrial conglomerate. However, let's not forget that GE shares have significantly underperformed the broader market over the last 1-, 3-, and 5-year periods.

 

Yes, as a long-term shareholder, this chart hurts. Lately, the bears main talking point has been the company's cash flow prospects, and rightfully so, as Mr. Culp recently announced that industrial cash flows would likely be in "negative territory" for 2019.

 

While the negative industrial cash flow prediction is a concern, I believe that investors should have largely anticipated cash generation to be a major headwind in the current year. As such, in this article I will focus my attention on how GE is financially positioned for what is expected to be a challenging year.

 

Read more here

 

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