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Strategies & Market Trends : Fundamental Value Investing

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To: Sergio H who wrote (3143)7/24/2013 9:31:29 PM
From: Spekulatius  Read Replies (2) of 4719
 
Cutting ties with the finance division would hurt GE shareholders instead of benefiting them because the Fairfield, Connecticut-based company trades at a price that’s higher than its value if broken up, Jeff Sprague, an analyst at Vertical Research, wrote today in a note to clients.

“The company is being rewarded in a sense for being constituted in its current configuration,” Sprague said in a telephone interview. “It might sound good in theory but it’s just not a good idea to split the company given where the valuation is.”
Not the key phase in this article. It basically states that GE is overvalued. Very few conglomerates trade above the value of the sum of thir parts nd GE is one of them. Typical conglomerate discounts run at about ~20%.
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