GE Aerospace (GE)

Has come back and reinstated their dividend and still have some very good businesses. A very hard company to analyze so he has not bought this yet. Not on his list of Buys right now.

(Market Call Minute.) A good play on the US economy. Diversified financial, and industrial.

Exposure to global growth. Sold Canadian helicopter business. You get exposure to the US and Europe. It is the biggest solar company in the world. Decent dividend.

There is a saying in the market that so goes the market, so goes GE. They cover almost every segment of the economy. If it under performs, people are taking money out of the broad economy. He doesn’t think we have to worry too much. He is not looking for a major correction yet. Today's acquisitions were small compared to the size of GE. Buy on dips but be careful because then there could be a correction.

He still sees some upside. His view is that it is more valuable dead than alive. If new management ever came in and broke the company up, your investment would double. Put together in a dog’s breakfast it is just a conglomerate that performs like the market.

There are still good opportunities here. They are getting back to their knitting. There was a period of time, post 2008, where the market punished them because they had become too committed to GE Capital and too diversified outside of their industrial roots. Now getting back to their industrial roots and people are starting to forgive them for the 2008 situation. The multiple differentials between some of the other major industrials is starting to shrink. Likes this one long-term.

Prefers more specific areas to get the growth. If the spin off of the financial side does well it will be a huge plus. It could be a long term hold.

Couldn’t find it as compelling as some others in his portfolio but it came up on a screen. Trading at a cheaper valuation from the overall market. On a pullback it could be interesting, but he sees no catalyst for a correction.

Thinks we are improving economically so don’t exit the stock. Thinks there will be a rally towards the end of next year.

Really well-run business. Went through a few problems in the financial crisis, but now have a really good assortment of really good industrial businesses. Good long-term stock. If you don’t own, wait for a bit of a correction.

Has really been punished as an industrial for becoming too financially oriented through the 2007-2008 period because of GE Capital. They were trading at probably 2 multiple points below what all the other US industrials were trading at. He saw that this was a company that was growing its earnings at a rate that was as good as, or better than a lot of the other industrials. They have gotten back to their industrial roots.

He believes in worldwide global recovery. This company has everything that they need to participate. They have a real direction and know where they are going to go. Great balance sheet and great management.

(Market Call Minute) GDP dependant and reducing financial services weighting which will be very good for the company.

(Market Call Minute.) He would be buying this as a large cap conglomerate industrial in the US. Good cost-cutting potential.

Likes this quite a bit. Bought this in August because it was trading at a 2 or 3 multiple point discount to the rest of the industrials. People are starting to forgive the GE capital debacle and to build back the multiple to a neutral position against its group.