EKS, I just reviewed that post and note that the reason for the "D" rating by Schwab was a negative rating on the fundamentals: "Free cash flow generation and growth; efficient mgmt of capital; and ability to fund capital."
I don't know if ANYbody anticipated the almost total shutdown in the capital markets that has been going on this year. But I guess the Schwab research group correctly identified a potential problem area for GE.
Some felt that given GE's credit rating, it should be able to have ready access to credit markets. But when banks are scrambling to re-capitalize, even highly rated customers simply cannot get credit.
FWIW, as of April 4, Schwab had a "C" rating on GE. I'm going to keep an eye on when they update that rating. Maybe on valuation basis, GE gain a little, tho on momentum, it'll be downgraded.
Don't you think that the FED and central banks globally are working overtime to do everything they can to get credit markets flowing again?
I'm musing that if GE, within the next couple of years can get back to where it closed yesterday (36.75), then with the divie of 3.5% each year, it might generate average yield of 10.9% over the two years. Hmmm... Does it drift lower from here or put in a V-bottom. We're at the beginning of reporting season for Q108. There will likely be more than one negative earnings surprise. |
