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General Electric: It's The 'Story' That Really Matters

November 4, 2019

Summary:

- General Electric reported Q3 2019 results that beat the top- and bottom-line estimates.

- The operating results were well-received by the market but I believe that it was management's commentary (i.e., bull case) that moved the stock higher.

- I plan to remain long General Electric.

 

General Electric ($GE) recently reported Q3 2019 results that were well-received by the market, as shown by the fact that the stock finished last week up over 15%. On a YTD basis, GE shares are now outperforming the broader market by ~20 percentage points.

 

As expected, there was a lot of noise in GE's quarterly results but I believe that the company's newish CEO, Mr. Larry Culp, has shown the ability to win over the market by improving sentiment. Outside of GE's quarterly operating results, I believe that management's commentary (and strong guidance) is what really moved the stock. Simply put, Mr. Culp's "story" is what really matters, at least for the time being.

 

But, it also helps the bull case that the numbers and guidance supports the story that is being told.

 

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