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Non-Tech : All Industries Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Oblivious who wrote (6046)	12/6/2011 5:59:44 PM
From: Keith Feral	Read Replies (1) \| Respond to of 13719

GE looks solid!

To: Oblivious who wrote (6046)	12/7/2011 11:26:24 AM
From: Brasco One	1 Recommendation Read Replies (2) \| Respond to of 13719

GE Capital Meeting Takeaways ?? GECS expects double digit earnings growth & div. reinstatement in 2012 GE’s Finance meeting yesterday was fairly reassuring. GECS has materially more European exposure than most banks (a significant investor concern). However, we believe European risks are being appropriately managed, and liquidity, capital ratios, losses/impairments, and the re-mixing of assets are all trending in the right direction. While GECS is somewhat constrained in what it can say regarding its relationship with the Federal Reserve (its new regulator), it appears that GE is on-track to reinstate the GE Capital dividend to historical levels (~40-45% payout ratio) sometime in 2012. ?? Competitive landscape remains favourable GE continues to benefit from an attractive pricing environment, driven by the retrenchment of traditional lenders in its key end markets. While total assets (or ENI) are unlikely to grow in the near-term, it appears that GE has substantial opportunities by continuing to run-off non-core assets (~$80B of ~$450B ENI) into more profitable areas. GE remains focused on managing portfolio risks (particularly Europe and real estate), but also appears willing to be opportunistic if assets become available at the right price in Europe or elsewhere. ?? Next Tuesday’s annual outlook meeting could be a positive catalyst We believe management has a compelling story to tell about the prospects for industrial earnings growth in 2012, as backlog pricing improves, Oil & Gas remains strong, and healthy growth in the high margin service business continues. ?? Valuation: We have a Buy rating and $20 price target on GE Our PT reflects a ~10% premium to the market multiple on our ‘12 EPS estimate.