Discussion in 'Stock Market' started by DanK, Feb 10, 2009.
Thoughts on GE?
One of the more painful companies to watch and for me to invest in for the stock market game.
YTD: The stock has lost almost $4.00 per share and is only worth $11.62.
This time a year ago, it was hovering around $34.00 dollars; it's best before 9/11.
Ya, I first bought in around $20.00 (after buffet announced his big purchase) and have been averaging down since
I will be seeing a R &D executive at GE this weekend and wil ask him what he thinks. They just started some interesting new collaborations with Nuovo Pignone that look promissing.
I'm watching, almost with hopes that it will sink into single digits, with some forlorne hope that once a level like that is reached, the board of directors will ask for Imelt's resiignation. The low today was $10.66 share price. My wife worked at GE between from 70 to 72 and a small payroll deduction was taken out for stock purchases, not more than $300. Through reinvestments of dividends that grew to 1,000 shares over the years, something we considered to be a supplement to our SS at retirement.
When it was at $59 a share my wife said "sell", and I said let's wait a little while for the president to get his proposed capital gains tax passed, because we had almost no cost basis, we'd pay too much cap gains tax. But by the time Congress passed any cap gains reductions it was too late and too little. And by that time the skid had gotten well advanced.
Since all this loss has taken place under Imelt, I've hoped that at some point he would be replaced for the good of the company. But it appears that either the board of directors are as ineffective as he is or they are putty in his hands, I suppose for the lucrative easy pay and the perks he provides. Unfortunately I have to conclude that they are all of the same ilk.
In an article (Put the Shareholders Back in Charge of Companies - WSJ.com ) in the WSJ Yesterday, February 9, Carl Icahn said "Managers often come up with creative ways to perpetuate their reigns of error. These include myriad takeover obstacles like poison pills, bylaw provisions, and others devices that thwart shareholder efforts to hold managers accountable."
As the economy continues to fall, congress needs to do something more effective and directly to improve Corporate Governance. They need to write some legislation to give stock holders more influence in electing new boards, submitting resolutions for stockholder votes and input in executive compensation and other issues.
First, Congress needs to pass legislation giving shareholders enhanced rights to elect new boards, submit resolutions for stockholder votes, and have far more input on executive compensation and other issues. As companion to these reforms, Congress needs to pass legislation that prevents managers from making it more difficult for shareholders to exercise their ownership rights.
Icahn says "If Congress is reluctant to make wholesale changes at the federal level, it can enact one simple provision that would allow many of the needed changes to take place on the state level: It can give shareholders the right to vote to move a company's legal jurisdiction to a more shareholder-friendly state such as North Dakota. Currently that decision is in the hands of company boards.
It is not reasonable to expect managers with failing track records to improve their performance on their own. They will only improve if they are placed under greater pressure by shareholders empowered to exert more influence on management decisions. Nothing will do more to improve our economy than corporate governance changes."
This is the kind of change I am hoping for.
I like GE. I think they're at a pretty stable low at this point, their balance sheet isn't horrible, and they stand to gain from the stimulus and the whole "green" push.
My contact is now in Product and says the turbine engine stuff happening with Nuovo Pignone, Teradyne, GE's new partner in India and at the plant they set up near Warsaw is going extremely well. 4 internal reports just went out concerning the financial situation and like any other company, recovery is going to take 2 or 3 years. Things are not good but they are not yet in desperate straits.
Could have had it at less than $6.00 just last week!
GEN ELECTRIC CO
After Hours: 9.05 Up 0.18 (2.03%) 7:59PM EThelp
Last Trade: 8.87
Trade Time: 4:01pm ET
Change: Up 1.46 (19.70%)
Prev Close: 7.41
1y Target Est: 14.04
Day's Range: 7.95 - 8.99
52wk Range: 5.87 - 38.52
Avg Vol (3m): 154,105,000
Market Cap: 93.67B
P/E (ttm): 5.17
EPS (ttm): 1.72
Div & Yield: 1.24 (14.60%)
ya ...i sold a bunch of bofa at 60.....it is now at 4.......thinking of buying again.....
Yeah if my limited amount of play money wasn't tied up in a damn financial ETF that was tanked at that moment I would have grabbed GE at $6. Holding that ETF looks like it might pay off though. I'm hoping for one more big bounce tomorrow on SOME kind of M2M news and I'm going to dump it and wait and see if GE comes down. If not, I might play with a 2X oil ETF (I'm drawn to the leveraged ETF's like a crack fiend these days ). Oil demand numbers are coming out Friday and it looks as though it might be bullish. I think we're watching oil slowly creep up into the 50's and maybe higher. OPEC isn't making any money at ~$40.
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