GE Aerospace (GE)

It looks like a value trap. It is hard not to see some value and the ability to turn it around. They cut away a lot of the things you don’t want to be in. It was heavily owned institutionally but you could do worse owning it. There are things he thinks will do better in the short term. Don’t bet the farm on a fast turnaround.

Have been a mess. They cut their cash flow projections in almost half. You can probably argue that there is value there, but he would stay on the sidelines. Some structural issues. Hard to track with so much going on.

Could sink further. Breaking it up would be positive. The gem here is their healthcare side. Power and jet engine sides are dragging down the stock. Wait for good news before stepping in.

They have to demonstrate they can get the ship back on course. Everything that could go wrong has. Poor leadership. Cut their dividend. And yet it does have great products. Double-down now? Yes, except they have the biggest unfunded pension deficit around which will eat up cash flow for the near future and hold back the stock taking off.

Hard for investors to explain what the company does. Strong brand, but the business has gone through significant transformation. GE is very different today, integrating the mammoth companies it has acquired. The company needs a big turnaround. Share price has dropped by 50% over the past year. However, it is still trading at 16 times earning, which is more than you want to pay for a turnaround story.

Everything has changed with this company. It went from being a darling 20 years ago at the end of the Jack Walsh era. Jeff Immelt was a darling for far, far too long. He is now out, and Mr. Flannery is in. They've ratcheted down their earnings expectations, as their cash flow is awful. He wouldn't look at this. It will have a bottom, but he doesn't know where that is.

Just hit a 6-week low and has reportedly missed on both the top and bottom line. Guided slightly higher for 2018, but the street didn't care, because there is an SEC investigation and they have to restate 2017 and 2016 results. Not a value stock. It’s trading at 17X forward earnings with an uncertain growth rate. 4%-5% seems to be the consensus, but who knows. Their plan of selling $20 billion in assets and $1 billion in cost cuts really isn't enough for the street. He wouldn't want to catch this falling knife. Would rather see it higher and at least break through the 50-day moving average. Prefers United Technology (UTX-N).

It is in the falling knife phase. It is a speculation and it could be time to dollar cost average. With the markets so strong right now, what will happen to this stock in the next recession. For the deep value investor it may be worth putting a percent or two into this.

The company is now starting to break up into its component parts to release a tremendous amount of value. Hopes there is still lots of good value left. One of the problems is that their insurance side is still weighing down the company, and they have had to take an enormous write off of $6.4 billion, with more to come in the next 2 to 3 years.

In the speculative portfolio he manages, he has taken a position in this. It was the dog of the Dow last year. When he was preparing for this show, it was trending nicely and was the 2nd best performer in the Dow this year. Now it is on its way to becoming another dog of the Dow this year. This is purely an asset play. He is looking for Flannery to move this company around and try to take advantage. All the negative news today has caused another downside of about 3.5%-4%. This is not in his core portfolio or his US growth portfolio, it is in his aggressive portfolio. Dividend yield of 2.6%. (Analysts' price target is $20.95.)

Probably the worst performing large cap in the US last year. They are so big and there is so much stuff in them that you don't necessarily really know what is going on inside. If you own this, it is probably a Hold, as he doesn't see much more downside. It sounds like there could be a couple of more pieces of bad news to come. Have some great assets long-term, and expects the company to get back on its feet, and march forward over the next 5 years.

This has been a huge underperformer for a number of years. There seems to be interest now because they have done so poorly. The new CEO has reduced guidance considerably. They are still trying to reshape their business. This is on her Watch List, but she is not tempted to get in yet.

Had owned this when it was trading somewhat in a pattern, but it broke support and he got out. It’s at the very, very early stages of "possibly basing", because it hasn't had enough time to build a base. You need a few months of sideways, upside, downside, choppy look on the chart, and then a break out before buying.

This is a turnaround story. Management has come in and have done a lot of hard things, cutting the dividend twice in the last 130 years. They've gotten rid of a lot of management and a lot of costs. They are going to be selling a lot of businesses and paying down debt. They are doing the right things, but it is going to take time. He can see much more of an upside on the stock over the next year.

The problem with this company is all in their past because of the old CEOs attempts to turn the company around. There is a new CEO, and things are unknown as to what comes next. There are better companies out there he would rather invest in, where he is getting free cash flow growth on a constant basis. The dividend was cut, which is not a good sign of good cash flow management. If he owned this, he wouldn't Hold it.