GE Aerospace (GE)

General Electric (GE-N) or Visa (V-N)? This is an industrial company. They are spinning off their GE Capital business. You are really buying a well diversified industrial company that is global that is hopefully going to grow. Between the 2, he would probably pick Visa because it is a much better longer-term growth story. He wouldn’t buy this because you are not going to get a bump on the multiple anymore.

Had a nice 10% bump on Friday when they announced the massive sale of their financial products division. They are hoping to have it down below 10% of revenue by 2018. Has this on her radar, but doesn’t see a pressing need to get into it right now. It will still be a couple of years in transformation. Prefers United Technologies (UTX-N).

He still likes the name. Stock has not been very robust in terms of performance, but this is a proxy to the US economy. They are doing a lot of things in terms of divesting out of the things that don’t make them a lot of money. Growth rate is still in the high single digits at 8% -9%. You are paying about 14X forward earnings, so it is not extremely cheap, but looking at the industrial space, a lot of these names are in the higher PEG ratio type of area. Dividend yield of about 3.5%.

Sold his holdings. One of the top down influences that he felt was that he didn’t want to favour his portfolios with companies that were exposed to non-US denominated revenues because they would be averting by a stronger US$, which has sort of come to pass. The French government got involved with their negotiations and started to extract concessions from GE, and this didn’t leave a very good taste in his mouth.

They have a big energy exposure, and international business weighs on them. Their industrial business is doing well and they have a huge cash pile off shore. It may not get a fast move in the stock price but it could be a good long term hold.

Not an expensive stock. Trading at 15X earnings. Really nice dividend yield of about 3.5%. His problem with the company is the reality of what drove them to high multiples, which was GE Capital. That is now being sliced and diced and pushed out of the business. They had a move to the oil/gas business in a way and that is hurting them. Feels it is fairly priced at these levels.

(A Top Pick Feb 13/14. Up 6.7%.) Also, the US$ has appreciated by about 14%-15% against the Cdn$. This is a laggard to some of the other names right now because of its exposure to the energy space, but the stock should be supported by the improving global demand in longer infrastructure cycle businesses such as power generation, water infrastructure and jet engines. Pays a 3.5% dividend yield. Still likes it.

Earnings and revenues seem to be flat along with its metrics. The chances of it breaking through $25-$27 are remote.

This is such a large cap conglomerate type business that if the US economy does well, a lot of the businesses that they are in should appreciate. You get a bit of a dividend yield while you wait. Has lagged the market over the last couple of years, so could play catch-up.

A great conglomerate. It has been reengineered into a great company. It is like buying the global industrial space. A rock solid dividend.

Going through a transition right now. Sold off their credit card business and are focusing more on the industrial side. There is cost-cutting, buy back and they are aggressive with the dividend. If it were between $15 and $20, he would be an aggressive buyer. At these levels, with 6%-8% EPS growth and a dividend yield of around 4%, you are looking at a return of 8%-12% going forward.

(A Top Pick Feb 13/14. Down 1.28%.) His Canadian clients are still up 13% because of the currency. Thinks this company will continue to do well with a couple of longer-term trends. The general market improvement will help them along with global demand for longer-term infrastructure types of businesses. They are simplifying their businesses and getting out of some that they shouldn’t be in. Sticking to more of their core industrial operations. Dividend of 3.75% will be increased.

(A Top Pick Jan 7/14. Down 8.93%.) This disappointed on the financial side as US financials got squeezed. As an industrial, it has all kinds of great things that they have not as yet been able to translate into earnings growth. His clients in Cdn$’s are up 6% in the past year because of the exchange rate.

Basically 2 companies, industrial and financial services. The financial services gets painted with the same bad brush that other financial companies do. Until you see financials come back, you aren’t going to see this company do a whole lot. This is a huge, huge company, and to move the needle would have to be some drastic projects or a real change in sentiment. Depending on your market view, this could be a good Hold.

Sold his holdings recently. Wasn’t impressed with their Alstom deal in France. Also, saw the US$ was showing significant strength against the euro, so he decided to pare back on his industrial holdings. They also have some energy exposure.