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General Electric: The Danaher Deal Makes (Financial) Sense

April 3, 2020

Summary:

*General Electric recently finalized its $20 billion BioPharma deal with Danaher.

*The company's stock continues to underperform the broader market but I believe that this $20 billion deal significantly improves General Electric's risk profile.

*I am long General Electric, and I plan to stay long through at least the COVID-19 related headwinds.

 

General Electric ($GE) has (and will continue to be) a battleground stock and, so far, the bears have been winning the fight. For example, GE's stock has significantly underperformed the broader market over the last 1-, 3- and 5-year periods. And it has been more of the same so far in 2020.

 

Investors should definitely be concerned about the potential economic impact of the current health scare but, in my opinion, this further pullback will eventually turn out to be a great long-term buying opportunity. Additionally, I believe that GE's $20B BioPharma deal with Danaher ($DHR) is a potential game-changer for this once storied company.

 

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