Thursday, November 2, 2017

New turnaround bet: General Electric Company

It seems the only original component of  Dow Jones Industrial Average still trading today - General Electric Company (NYSE: GE) - is in trouble or atleast has fallen out of favor.

General Electric stock price chart taken during trading day on 2nd Nov 2017.
Chart courtesy of

It qualifies for a good turnaround bet for patient long term investor as the underlying business is in my opinion solid and extremely well diversified over several industries.

Originally I came up with this investment thesis after scanning well known large US companies in which insiders have been net buyers this year.

GE is a multinational conglomerate involved in multiple different industries. There has recently been change in top management and a lot is expected from new CEO. He is expected to lay out plan for "new GE" on November 13th in GE investor update event [link to related article].

One thing many commentators seem to be expecting is that GE will cut dividends. I buy their arguments and reasoning. It makes sense that the new CEO cleans all possible "tables" now. The company itself have announced already that it will divest more than $20B worth of assets in the next two years, which typically unlocks hidden value.

I initiated buying on the 8th consecutive loss day (today could end up being 9th). The plan is not to try to figure out where the bottom will be, but to continue purchases along the way (down or up) in near future.

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