GE Aerospace (GE)

A very cheap company on a “sum of the parts” basis. If you look at all the various businesses and do a standalone valuation analysis and add them all together, you get a value that is in excess of the current stock price. Reasonable dividend yield. Will benefit from an improving economy.

At the height of the financial crisis they really got into trouble with their financial side. Growth on the industrial side has been very good and they have improved the financial component of the business. However, if financials falter in any way, shape or form, this company will go with that. He is pretty constructive on this company.

They have quietly been restructuring since ’08. Market continues to punish them for GE capital. Thinks that what they have done has taken them back to their roots and their growth will be as good as or better than other industrials. Market will give them back their multiple.

His Sell target is mid-$30’s. Have increased their dividend 4 times since he bought it. Likes the company. You don’t get more of a bellwether of the economy then this one. Smartly managed.

His model price is $20.26, a negative 16.75%. He is not a big fan of this company. They need to do a lot of restructuring, especially of GE Capital.

Has been a laggard but is now starting to perform well. Its best divisions are starting to step forward. Company was hurt in recent years by its very, very large financial services division and they are now shrinking this division. However, this division is now starting to pay dividends to the parent company, so he expects the company to continue to raise their dividend.

The financial side of their business really got out of hand through GE Capital but that has been pared back. They sold off non-core assets, their fire and security business and right sized the GE capital business but the company is still sitting in a “show me” type jail cell. This creates some opportunity. There are probably 2 or 3 multiple points that it is trading at a discount to. He is kind of interested in this right here.

(A Top Pick April 19/13. Up 9.67%.) Likes the multi-industrial space. This has a number of different parts to the business on the industrial side. Have been running down their capital side of the business over time.

(Market Call Minute.) Diversified US industrial. Hold this, is a play on the improving US economy.

Their difficulties culminated in 2008 when it was shown that they were not just a pure industrial but really a financial company and a great part of their business was highly levered. Have done a lot of reorganization since then. Have become more streamlined. The market is pricing in the lack of confidence. The multiple is a couple of points below some of the other major US companies, which he feels is the uncertainty. There is an opportunity for organic growth and earnings increases.

Extremely interesting company. Stock has been working higher but FMV is actually not very far away from its present price. However, this is a company that is composed of a considerable number of either 1^st or 2^nd rated company in each of the industries that it is in. Very high quality portfolio inside the GE package. They would be well advised to break up and split the parts out because the component parts would probably be worth double what GE is selling at today.

(Top Pick Apr 19/13, Up 7.86%)

A very solid financing company. Diversified global well run company.

Yield at 3.26%. Likes GE. they have global revenus coming in, and you've got the yield while you wait.

Street has gotten a little bit more comfortable with this name over the last couple of quarters so expectations have ratcheted up. Stock got little ahead of itself as it approached the $25 mark but has dropped back since. The parts of the business that he really likes are functioning. Good balance sheet. Yield of 3.35%.