JPM lowers target to $9 from $13. Bernstein (who??) intiates with Mkt perform, target $15. wonder how Buffett feels about naked short selling now?
More importantly, how does Jeff Immelt feel about being arrogant enough to think that the both the current dividend and a AAA rating is sustainable? One of the two have to go. I've heard (can't remember where) that the bonds are pricing in a rating a few notches lower than AAA already. Looking at the relative underperformance of the stock, GE is sticking out like a BAC-type sore thumb.
http://www.ft.com/cms/s/0/9cdf7854-f3b6-11dd-9c4b-0000779fd2ac.html And you know he's not telling you what he really thinks.
Back in mid January I was listening to bloomberg and they mentioned that there were a HUGE amount of Feb Puts on GE around $7.50-$8 a share, at the time I believe the stock was trading around $14-$15, someone knew something to predict that GE stock would nearly fall 50% in less than a month.
GE has a float of 10.4 BILLION Shares. Could you please explain to us how short selling, even naked short selling, could bring a firm with over 10 BILLION shares in float far below its true value ( vs. the fallout from retail consumers cutting back on buying appliances, govts. and municipalities cutting back on industrial products and people paying their GE credit card bills late or not at all ). You don't have to read between the lines to see that I do not agree with you. So, if you could, please spare us the typical "ET flames and insults" that usually accompanies a response to a dissenting view on this site. A precise and succinct "Step 1, Step 2, Step 3 (etc.)" explanation as to how a stock with the largest float of all publicly traded stocks could be manipulated below its "fair value" by short sellers would be very much appreciated. Thanks.
While I don't do "fire and forget" trading or investing much I would think that GE under $10 is a screaming buy for someone looking to add it to their long-term portfolio with a 10-15-20 year horizon. Sure, the short-term might be a bit ...er, IS... a bit rocky but with a long-term perspective I think GE with its various diversified business lines would be a keeper if you can get it below $10 -- IMHO there is more far more upside potential than risk, even if they cut the dividend in the short term. With a long-term view, you could see both the dividend restored (if it gets cut) and longterm capital appreciation. Not a bad r/r in my view. Disclosure: I am short GE puts.
My question then is that GE underperformed the market during the last bull run, so is there better opportunities elsewhere?
I am also watching UTX -- another global conglomerate that IMHO isn't as trapped to capital finance as GE is with GE Capital. If I can start a position in UTX down in the low 40s I will.
I was just making the point that they haven't been downgraded YET. And yes, I'd give you odds. I'm actually short GE, but not necessarily because of a downgrade, more so because either way you cut it, that stock's going to below $9. Honestly, I'd be happy with a downgrade. I'm no fan of GE, just a fan of accurate data.