GE. Apparently the contributor to Seeking Alpha didn't believe all the noise that GE was going to ZERO and it appears he didn't wait for any technical indicator to allow him to size in off his initial entry.
So is he correct re his valuations and his near term/long term targets out to 2020. TWT.
BUT those who do have a good memory should understand how it came down, and what the steps are to the upside.
BTD? You decide. I know what I'm going to do when and where. Fintas
"Bottom Line: Why I'm Not Selling a Single ShareI initiated a partial GE position last year in the $12-13 area. However, I then tripled my position at around the $7 level, as I outlined in this article here. This brought my overall cost basis down to about $8.75 per share. So, now my entire GE position is up by about 23%, and I am not about to sell a single share.
I view GE as a long-term turnaround position, and I believe the company has significantly more value than what the market is giving it credit for right now. Once GE spins off Healthcare and Oil and Gas, the proceeds should go to pay down or largely eliminate debt. The remaining GE units are worth roughly $156 billion, which is about $68 billion above GE's current market value.
Furthermore, the valuation of GE's businesses is based on recent, relatively depressed financial results. For instance, once Power recovers and its earnings power returns, the unit will likely be valued at much more than just $30 billion, and its contribution to overall EPS will also rise.
Nevertheless, despite these relatively conservative valuations, GE's market cap appears to be undervalued by about $68 billion. This implies the company's stock price has roughly 77% upside potential in the short to intermediate term.
A 77% gain from current levels represents a price target of about $19, and this is where the stock may be headed, possibly by the end of this year. Therefore, I am keeping an outperform rating on GE, with a 2020 price target of $20-22." |
