GE

beerntrading said:
Having just picked up shares as a long term play, I'll take the other side of this. They have numerous divisions that individually have good cash flow, and some others without. Those with poor cash flow are still attractive acquisition targets because they offer good turnaround potential. A bloated corporate culture is largely behind its underperforming relative to peers. New CEO is competent with easy-to-cut fat all around. Sale of underperforming divisions will provide cash that could support share buybacks and dividends while good performing divisions generate and grow cash flow. The only question here is if competent leadership (both top and mid levels) is present. I say yes, and it's a buy.

Also, it's retreat from $20 is a short term affair. @ironchef, you know where to look for this ;)
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I was thinking along those lines when I went long TEVA @$16-$17.:banghead: Hope you have better luck with GE.

In the mean time I will practice chart reading using GE chart.:vomit:

Best of luck to you.
 
ironchef said:
I was thinking along those lines when I went long TEVA @$16-$17.:banghead: Hope you have better luck with GE.

In the mean time I will practice chart reading using GE chart.:vomit:

Best of luck to you.
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Pharmies aren't diversified though like industrial conglomerates are...nor does a pharma developed 50, 70, or 90 years ago still generate significant revenue. That's the thing, with GE, all they need to do is cut the fat...And there's a lot of it. Pharmaceutical company collapse isn't just corporate mismanagement, though that could cause it...the collapse of a competent industrial conglomerate isn't going to happen from just a single generation of corporate excess...good company, bad management. An example of Buffett's rule to be greedy when others are scared (and scared when others are greedy).
 
beerntrading said:
Pharmies aren't diversified though like industrial conglomerates are...nor does a pharma developed 50, 70, or 90 years ago still generate significant revenue. That's the thing, with GE, all they need to do is cut the fat...And there's a lot of it. Pharmaceutical company collapse isn't just corporate mismanagement, though that could cause it...the collapse of a competent industrial conglomerate isn't going to happen from just a single generation of corporate excess...good company, bad management. An example of Buffett's rule to be greedy when others are scared (and scared when others are greedy).
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I am in general agreement with you. But FYI:

https://finance.yahoo.com/news/ge-ditching-2-units-why-163200211.html

Regards,
 
beerntrading said:
Pharmies aren't diversified though like industrial conglomerates are...nor does a pharma developed 50, 70, or 90 years ago still generate significant revenue. That's the thing, with GE, all they need to do is cut the fat...And there's a lot of it. Pharmaceutical company collapse isn't just corporate mismanagement, though that could cause it...the collapse of a competent industrial conglomerate isn't going to happen from just a single generation of corporate excess...good company, bad management. An example of Buffett's rule to be greedy when others are scared (and scared when others are greedy).
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@beerntrading "all they need to do is cut the fat"....I have to disagree with you here.

They are no longer the revenue machine they historically were. Capital was sold at laughingly low valuations (management was so proud how quickly they got rid of it, Ha.), Power is a mess and their recent Euro asset buys were at ridiculous premiums.

It will take years to reinvent this company, you want to tie investment dollars up in this ? Big opportunity cost. Obvi just my take.

also, I don't think investors are scared. There is no panic, just a reevaluation of what GE is today.
 
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sss12 said:
@beerntrading "all they need to do is cut the fat"....I have to disagree with you here.

They are no longer the revenue machine they historically were. Capital was sold at laughingly low valuations (management was so proud how quickly they got rid of it, Ha.), Power is a mess and their recent Euro asset buys were at ridiculous premiums.

It will take years to reinvent this company, you want to tie investment dollars up in this ? Big opportunity cost. Obvi just my take.

also, I don't think investors are scared. There is no panic, just a reevaluation of what GE is today.
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It's a fair assessment. I flat out reject that opportunity costs is a thing though. If only because of the toxic questions it makes you ask. The better gains I could have gotten are the other side of the risk / reward equation...so, this may equally have been an "opportunity discount" as a cost (while also illustrating the absurdity of calling it a "cost"). It costs me nothing to pass up a better opportunity, just as I've gained nothing by sitting out a stupid trade.

But it comes back to, this fills a nice gap in my investing portfolio, with a manageable risk profile, and good cause to believe this is valued well under where it should be (for example, this dividend cut had been widely speculated about, but the stock gave up 10%...to my mind, the company is more valuable with the lower dividend).

But, we shall see...I've got time.
 
ironchef said:
Used to own GE stocks. Not anymore, so sad.
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I just ran some # on GE: Balance sheet is OK, cash is robust but so is long term debt. What worry me is cash flow does not support dividend and capex even with 50% cut in dividend so they need to keep selling assets.

Mr. beer said, this is time to take a position. He is right if he holds long term as I think new management will figure things out eventually.
 
beerntrading said:
It's a fair assessment. I flat out reject that opportunity costs is a thing though. If only because of the toxic questions it makes you ask. The better gains I could have gotten are the other side of the risk / reward equation...so, this may equally have been an "opportunity discount" as a cost (while also illustrating the absurdity of calling it a "cost"). It costs me nothing to pass up a better opportunity, just as I've gained nothing by sitting out a stupid trade.

But it comes back to, this fills a nice gap in my investing portfolio, with a manageable risk profile, and good cause to believe this is valued well under where it should be (for example, this dividend cut had been widely speculated about, but the stock gave up 10%...to my mind, the company is more valuable with the lower dividend).

But, we shall see...I've got time.
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"Opportunity cost" is a term of relativity, it can be positive or negative.

The stock price did not drop because of the dividend cut (as you noted it was widely anticipated). It dropped because investors did not like what Flannery had to say.
 
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