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Non-Tech : General Electric (GE) -- Ignore unavailable to you. Want to Upgrade?

To: Mick Mørmøny who wrote (1964)	4/14/2002 3:53:54 PM
From: Ted The Technician	Read Replies (1) \| Respond to of 3256

Mick, good post. Regarding >> "Adding all these gains together means that G.E.'s continuing operations produced earnings of around $1.16 a share last year, Mr. Olstein said. And at a stock price of $33.55, that means investors are paying 29 times core earnings to own G.E. shares even as its revenue is in decline. By contrast, Mr. Olstein says a cyclical growth company, growing at the same rate as G.E., should sell for a multiple of 20." This implies that the GE stock price should be around $23/shr. I agree with this logic. Regarding >> "So then you have to say as an investor, `that's uncertainty.' And when you have increased uncertainty, you're going to pay a lower multiple for a projected earnings stream." In this case, a multiple around 15 might be more appropriate ($19/shr). If there were any significant fudging of the earnings numbers, all bets would then be off. The stock price would drop to the single digits.