$31 in Two Years General Electric Co is evaluating strategic options for its venture arm, the company said on Thursday, as the industrial conglomerate looks to cut down billions of dollars in debt and turn around its ailing power unit. "During this time of transformation for GE, we are evaluating strategic options for GE Ventures to continue delivering returns for our shareholders and partners," a GE spokeswoman said.
g
If you were worried about short sellers - worry no more.
GE stock has moved about $2 in the past week or so and anyone of the people holding the $80 billion in short positions lost a lot of money and are now sidelined for good.
Someone or someones big are now buying into General Electric.. Buffet? Ackerman? Paulson?
Add all the good things happening (see below) that Goldman Sacks upgraded today to $15
the March 10th investors meeting which will definitely move the stock
The 1st quarter FCF being at the least down from $2.2 billion a year ago in 1st quarter. which was disaster but got rid af skeletons in their closet
And a projected FCF of $-.2 to $-.6 billion this 1st quarter, the purchase rush all over the world to move into wind power.
GE Haliade is the dominant offshore turbine wind choice, and in wind power GE is getting better situated to make this their 2nd most important dominant industry,
The pairing up with Toshiba for the Asian market and especially Japan.
The recovery of aviation as the vaccines are injected worldwide
The loss of Pratt and Whitney and also Rolls Royce aircraft engines as serious competitors to GE engines (GE is the major 747 engine supplier as of now)
Their new found place dominating the industry with their certified new GE9x engine, and the stability of their healthcare profit center.
That along with Baker Hughes stock worth more every week and GE having at least that $8 billion asset paid for
the serious reduction of all their overall debt
the minimizing of their pension funding necessity that now exceeds the 80% needed (now at lest t 81%
the return to inflation and every 1/2 point adds to the pension fund income $0 billion, the reduction of their exposure and borrowing at GE capital
the the return to a better power generation and far more friendly equipment offering - all this and more is a rel reason to look at a $20 stock coming up.
I personally can see them moving the over $10 billion free cash flow for 2022 and a $30 price coming up in the nearer and not the far future
and there is little to stop it from happening.
All good nes for Genersl Electric.
T
General Electric announces cost-savings actions • GE voluntarily pre-funded $2.5 billion of estimated minimum ERISA GE Pension Plan funding requirements for 2021, 2022, and into 2023. • GE also repaid $1.5 billion of its intercompany loan to GE Capital. • These actions reduced GE''s pension deficit by $2.5 billion and reduced the intercompany balance, further simplifying GE. Including today''s announced actions and scheduled maturities in the fourth quarter, GE will reduce debt by approximately $14.5 billion in 2020-including $9.6 billion in GE Industrial debt and $4.9 billion in GE Capital debt-and by approximately $28 billion since the beginning of 2019.
(GE), (Trade)
g
There are things that you “KNOW” and things that you “THINK”.
Any good investor realizes, it is the balance between the two that makes money.
So the quarter ended last night and
WHAT DO WE KNOW?
We know the pandemic is fading and Aviation is rapidly returning.
We know that the government is focused on environment and energy.
We know that GE is deep into all sorts of energy and environmental things (wind).
We know that people are returning to elective surgery and GE MEDICAL will benefit.
We know that GE will spend a lot less on interest payment – maybe as much less as $1 trillion per annum.
We know that GE has solved the GECAS problem – cleverly keeping half ownership and getting cash in the deal. We know that GE CAPITAL is dead and buried. Reporting will be simpler financials.
We know the REVERSE SPLIT is formally announced – taking away uncertainty.
We know that the next 3 quarter will compare to last year’s 3 quarters and that they were during a worldwide shutdown.
WHAT DO WE THINK?
You can draw lines from the above.
It is reasonable to think GE will return to $100 billion sales volume.
It is reasonable to think that GE will get to at least a $10 billion Free Cash Flow in the next 24 months.
It is reasonable to think that GE had put behind itself years of disappointment and bad deals.
It is reasonable to think that there is a new spirit prevalent amount the GE employees.
It is reasonable to think that the new GE management is razor focused on cutting waste, adding profits, and generally better management.
And it is reasonable to think that going forward GE will start looking at making merger deals.
CONCLUSION
The world will not know anything more until the Q2 results are posted. I doubt there will be any announcements for the next 4 weeks.
If the results of Q2 are at all decent and the market believes the future will be bright – the stock will move upward and leaves these levels forever.
If the Q2 results are tamped down by Culp, people similar temperament like me will just think it is the last time General Electric is shedding earlier issues.
I for one will believe firmly that the upcoming Q3 and Q4 results will simply be far more exciting.
I can wait….
A
General Electric Gains as Citigroup Resumes Coverage With 'Buy' Rating Citigroup analyst Andrew Kaplowitz sees a "gradual but likely" recovery in GE's struggling aviation business as the bank resumes coverage with a 'buy' rating on the stock. MARTIN BACCARDAXUPDATED:MAY 14, 2021 7:39 AM EDTORIGINAL:MAY 14, 2021 General Electric (GE) - Get Report shares moved higher Friday after analysts at Citigroup reinstated their coverage of the industrial group with a 'buy' rating, citing a gradual recovery in its aviation business.
Citigroup analyst Andrew Kaplowitz pegged a $17 price target on GE, alongside the reinstated 'buy' rating, amid evidence of improvements across the whole of its business portfolio under CEO Larry' Culp's turnaround plans that could trigger "material upside" in GE shares.
Kaplowitz also cited a "gradual but likely" recovery in GE's struggling aviation business, which posted an overall decline in first quarter profits of 36%, but should get a boost from the Federal Aviation Administration's approval of Boeing's (BA) - Get Report fix for an electrical issue that had grounded around 100 of its 737 MAX jets. Boeing engines are made by GE in partnership with France's Safran SA (SAFRY) .
General Electric shares were marked 1.25% higher in pre-market trading Friday to indicate an opening bell price of $13.13 each, a move that would extend the stock's year-to-date gain to around 21.5%.
Late last month, GE posted stronger-than-expected first quarter earnings of 3 cents per share, as revenues jumped 16.6% to $17.1 billion, but held off on boosting its full-year profit forecast amid the ongoing hit to its aviation business from the global coronavirus pandemic.
A
General Electric Aviation (NYSE:GE) awarded a not-to-exceed $1.65B firm-fixed-price, indefinite-delivery, performance-based logistics requirements contract for the repair, upgrade or replacement, inventory management, and required supply response times of 17 F414 engine components in support of the F/A-18 aircraft.
R
GE has been doing all the right things to provide a better business plan that includes strengthening the company for the future and to provide a solid escalating share price to retain and attract future share holders. I feel very positive about their 5 Year Plan.
g
General Electric Long Term Care Insurance
1976 American Express started the long term care insurance business. Years later it sold the portfolio to General Electric.
In 2004 GE sold the portfolio to Genworth Insurance, but was required to keep part of the riskier policies.
By 2018 The Kansas Dept of Insurance was the lead regulator. It’s job was to make sure GE had put adequate reserves aside to match upcoming claims. The insurance portfolio was around $56 billion.
In 2018 "whistleblower Harry Markopolos" released a “bombshell” accusation. He claimed GE was deficient $18.3 billion in the reserves.
GE denied this and Kansas regulators said the claim was false.
Steve Tusa – analyst – went orbital. He accused GE of fraud, overstatements, etc. The stock crashed from $30 to $12.
The GE board was furious. They did not know if the accusation had merit. They fired Immelt, then Flaherty, and brought in Larry Culp.
For the next 24 months insurance reserves and claims were murky and unclear to the public.
In 2020 the SEC gave GE a “Wells Notice”. The notice indicated an investigation was planned to see if there was deficiency. I watched the stock crater in minutes of the announcement from above $7 to $6.25. I bought at $6.25 a lot of GE and made a large profit as the stock rocketed back to $7 in a day or so.
Culp did a deal. He paid $200 million to the SECto settle – even though there was no wrongdoing.
REAL NUMBERS.
The actual insurance numbers shown in the Q1 2021 10q SEC report tell a lot more.
On page 26 the insurance liabilities in 2020 were $29,667 billion. In 2021 insurance liabilities were reduced to $29,204 billion.
They further clarified on Note 13 page 39. In that note it said in Q1 GE paid out $866 million in total insurance claims for the quarter. They had in reserves for long term care $16,997 in 2021 – up from $16,934 in 2020.,207 in 2020.
They also clarified that the life annuities (monthly payouts for lifetime) were $9.105 billion down from $9.207 billion in 2020.
It also is obvious that the size of those in the insurance is rapidly shrinking and will be done in just a few years. Finally it now has little to do with GE profits and reporting.
SO, WHERE ARE WE NOW?
GE has set aside way more money than it needs. It is in a secured government=controlled insurance reserve account. GE is finally overfunded and free of regulators, auditors, and government.
The insurance was hidden as part of GE Capital for years. With the elimination of GE CAPITAL – these numbers are now in clear view.
Culp is rapidly clearing off old GE issues and moving ahead to mergers, profits, growth…. Culp has said he would like to sell the insurance portfolio and it may now be possible.
TUSA IS ALL HOT AIR Steven Tusa does not know what he is talking about.
He says he holes GE will take the extra insurance payback from the EBITA on its statement. EBITA is interest, taxes, depreciation, appreciation. GE is free of this accounting.
Either they are getting back money from long-ago premiums paid by public. Or they are recovering reserves – money they already own. If the insurance money recovered is income – it is legitimate. If it is added capital – it has no tax consequence.
Whatever the case – TUSA does not know what he says is totally wrong. Even if GE had some sort of incoming money – it would be not that much so far.
CONCLUSION FOR SERIOUS INVESTORS
I hope all the above helps serious investors reading this Board. It is probably too technical for the “gamers on this board” AND Freddie who likes the messages to be limited to a paragraph and kept extremely “one thought” simple.
Me – I like to analyze and make my decision knowing all I can know.
Posted by Gene
g
There is a much more important subject that is being overlooked. Three weeks from tomorrow GE will be announcing q3 earnings.
I expect good or possibly GREAT news.
But there are mixed signals out there….
Culp said FCF this year would possibly be $5.00 a share. On 1.1 billion shares that would me the profit was 5.1 billion.
But the analysts are only protecting .53 cents a share profit for q3.
Q1 was 3 cents ($0.34). Q2 was 5 cents ($0.40).
Adding 34 plus 40 = $0.74 profit so far for the first half of the year.
If you add the projected analyst profit of $0.53 for q3 profit projection The three quarters added together would be only $1.26 a share.
That would leave q4 profits projected to be $3.74 a share.
That seems to be totally imbalanced.
A fairer number would taking the remainder of $4.13 and equally dividing it into two parts.
$2.06 for q3 $2.07 for q4.
Simply stated, each quarter would exceed $2.2 billion FCF.
Anyone can easily reason out that GE would really be at 4 times $2.2 billion or $8.8 billion actual 2021 FCF - if property adjusted.
$8.8 billion FCF times 23 times earnings would drive price to $200 a share.
This is very possible and in 3 weeks the stock could "rock".
It all depends on how you crunch the upcoming GE numbers.
I think Culp is making lots of profit.
I think he is still quietly adjusting financials.
Recently it was removing factoring and ending GE CAPITAL.
But he has been spending liberally using $3.5 to end factoring and $1.45 to buy BK Medical.
Total spent so far in 2021 is $5 billion.
And somewhere he spent $8.9 billion in May to pay back bonds. I suspect this was biopharma money - but it was over a year late than that money had arrived.
So the money trail is very confusing.
Obviously we will know a lot more in 3 weeks when we get q3 results.
A surprised upward profit announcement is very possible.
Gene
g
GE to equip 110 MW of Indian wind projects under deal with CleanMax
April 21 (Renewables Now) - GE Renewable Energy will supply 2.7-MW turbines for three wind projects in India with a combined capacity of 110 MW under a multi-year framework agreement with CleanMax Enviro Energy Solutions Pvt Ltd.
The renewable energy arm of General Electric (NYSE:GE) will deliver 42 units of its 2.7-132 hardware for “onshore wind hybrid” projects in Karnataka and Gujarat.
The new wind parks will meet the power consumption of various industrial companies, according to the announcement.
GE noted that product design for the particular turbine model takes place primarily at its technology centre in Bengaluru, blades are being made in Vadodara and Bengaluru, while assembly is done in Pune.
The new order comes with a 10-year full-service agreement.
A
Today, GE Steam Power announced it delivered the first Arabelle steam turbine module for Akkuyu nuclear power plant – 4 months ahead of schedule. Once completed, the plant will generate 4.8 GW of CO2 free #electricity, enough to supply #energy to 5 million Turkish homes.
B
My dad worked for GE for 30 years, passed away away at 97 last year. He was GE all the way...everything we owned was GE. He was part of the Greatest generation.....saved saved saved....talk about being long on GE! Gifted my sister, brother and I 300 shares each back in 2000. At that time stock had already split 3 times, and stood at $60 per share. I am patient and I know GE will continue to rise. Leadership and vision still great.
g
These figures were taken straight from the 10K just filed
1) receivable factoring is being reduced from 3.2 billion to to $400 million - savings will be 2.8 billion going to Free Cash Flow
2) General Electric has an unused asset of $7.3 billion ownership in Baker Hughes that is available to pay down debt. There are $1.3 billion non recurring charges last year now going to the GE bottom line.
3) pensions: every 1/4% (quarter point) upward inflation interest improves GE pension fund by 2.4 billion. GE is now vested at 81% in their pension fund which is above the 80% normal for industry standards. Since we see interest rates moving upward - every point would benefit GE $10 billion or about another 10% in their pension obligation. That is a real eye opener for improving value and reducing their debt.
employment and plant closings
Not mentioned in this story are the fact that GE has reduced their payroll 15% last year and reduced by 50% from 334,000 employees to about 170,000 employees. That 15% represented a savings of about $12 billion payroll plus taxes. also they closed a lot of US plants moving from about 140 manufacturing facilities in the US to bout 70 plans now.
B
The $35 dollar year is about to start, many deals will be announced,along with large buyers of the stock, too easy as we all need growth
T
GE Cash Flow Appears to Be Improving, Thanks to Boeing, UBS Says
General Electric's industrial cash flow will be positive in 2020, according to UBS analyst Markus Mittermaier. That is an out-of-consensus view and, if true, would be good news for bullish GE investors.
When 2020 started, General Electric (ticker: GE) management expected to generate between $2 billion and $4 billion in industrial free cash flow. The company provides guidance for the industrial business free cash flow, excluding its lending unit GE Capital from the calculations. GE Capital is treated separately. GE industrial comprises its aviation division, its power generation units, and health care
F
Everything Culp has said....he has delivered. Everything he says....It will be delivered! GE IS DOING GREAT! The industrial free cash flow One of the most important metrics of the company, industrial free cash flow, came in at $2.3 billion in 2019. This is ahead of company's guidance of around $2 billion, implying that the company has sufficient cash generation to pursue new oppoortunities to enhance shareholders' value.
The company has raised industrial free cash flow guidance above analyts' projections, predicting it to be between $2 billion and $4 billion. This partially reflects GE's expectations of the Boeing 737 Max returning to service around mid-year and profits from selling its biopharma business to Danaher (NYSE:DHR).
C
AerCap Completes Acquisition of GE Capital Aviation Services from GE. DUBLIN, Nov. 1, 2021 /PRNewswire/ -- AerCap Holdings N.V. ("AerCap") (NYSE: AER), the global leader in aircraft leasing, announced today that it has completed its acquisition of the GE Capital Aviation Services business ("GECAS") from General Electric (NYSE: GE). ok, now here we go.
t
I think there are a few things that could move the shares higher, but none as important as buying back a large amount of shares. GE has been in a down sizing mode for the last few years (much needed) causing revenue to come down as well. So the question is what is the best way to spend the dollar to increase the value of GE shares? With billions of shares in a shrinking company and the stock so low in price, now is the best time to buy back like 250 million shares at a minimum. The future will only cost more, and it will send a message that the balance sheet will be stronger causing the share price to increase........Anything else like paying down debt, raising dividend , buying other companies, which may cause the price to increase just means it will cost millions or billions more in the future. Please Mgt. lets not make the same old mistakes with the new GE. Maybe that should be the new add meet the new GE, its not your fathers GE, lets hope!!!
R
I was very happy that GE was on the rebound and I thought that with the sale and infuse cash flow and focusing on core businesses, we would be heading to where we should be (20-30 range). Until.. the RS rumor/leak/announcement! What the efing is going on? I know that valuation is intact, and all that.. So can anyone tell us what is the purpose of the RS and how will it be good for the stockholders when the share price will be 8 times higher?
g
A Psychological Explanation on Trading General Electric stock
I just read the 8 pages 15,000-word Crypto story printed in a section in the Sunday March 20 New York Times.
It was a deep dive into explaining to me a lot of what Crypto is all about. And it is far clearer to me now what is happening with people buying General Electric.
Perhaps this will also explain why I can't keep posting on this Board at this time.
There are two universes out there - each approaching life from very different places.
INVESTORS One crowd is "future investing" and the other crowd is "not seriously investing long term". As an old-timer, I always thought of investment as evaluating a stock based on PRODUCT, EXECUTION, and POTENTIAL.
That translates into the Buffet idea of liking what the world is buying (PRODUCT), believing the management is working for my success (EXECUTION), and the forward ideas that things will be better (POTENTIAL).
FEW ACTUALLY TRADE THE STOCK
I am still amazed that only 6 million GE shares are traded in a day. That translate into .00454% stock trading daily which is a meager volume.
It is incredible that so few could depress a company stock price with over 1.1 billion shares out there.
There are about 10 million shares sold short in GE at the beginning of the month according to Marketplace. That is not a lot of short sod stock.
Looking at Raytheon, Honeywell, Lockheed and other nearly defense similar stocks - they have about the same percentage of short stock.
In fact, GE is little better than those others.
Obviously, most people and institutions (70%) are holding, not selling.
CRYPTO I just waded through crypto terms like Bitcoin, Ethereum, blockchain, crypto exchange, crypto compiled, minted, tokens, Web1, Web2, Web3, DOA (decentralized autonomous organizations), Friends With Benefits, discord chat rooms, tokens, platforms, NFT (nonnegotiable tokens), Metamask, whitelisting, OpenSea, metaverse, Axies, Helium, DeFi, Tradfi, Stablecoins,Tether, USD Coin, and a lot more terms way too complicated to post.
While I do not intend to comment much on crypto because I suspect there is large crowd here that is into crypto, I will make a few observations (purely my thoughts).
Crypto is based on a giant social network with an active populist effort to join in.
It is obvious to me it not clearly explained nor understood by seasoned old-fashioned investors.
The actual investment in all sorts of crypto is unproven, speculative, hopeful, futuristic, and Ponzi in pyramid, not safely investable, hard to redeem, and certainly different than what an investor like me would relate to.
There is a world out there that cannot understand my logic in posting.
They are loud, abusive, can say hurtful things like T Edison who said last week I was posting "100% bull_ _ _ _" -and that takes the wind out of my sails.
And there are at least a dozen others or more trolling this board with negative, abusive comments. They far outweigh the positive posts every day.
These posters NEVER give new facts or post things I can learn from. They freely give HATE COMMENTS and one of the worst is Richard Irvine who posts hourly.
And amazingly everyone is now a large GE investor. Many say they now own at least $100,000 to $2 million in GE Stock.
If that is true, you would think they would want to protect their investment by learning everything they can find out about the company.
You would think they would be smart investors looking for any news. You would think they would date the General Electric historical improvements to the positive last 24 months. Definitely forget anything done before Culp took over in October, 2018 as worthless news.
My father-in-law was an excellent attorney who said:
"If three men say you are drunk and you think you have not had a drop to drink - you better pull over and sleep it off."
That moral is clear. Listen to others. Try to get the truth.
This post is in answer to the many others who want me to post more and that is not reasonable.
A board like this filled with detractors. They have a right to their opinions and so do I.
The GE Board is not a good place to post facts and give clear reasoning. I really cannot research every sentence I post - but most are on target. You cannot mute all the detractors. Certainly they have ways to get through.
But it is important to realize that General Electric will keep reporting better numbers and more wins over time and everyone invested long term will make a lot of money.
Think of it as an investment - the same as buying a house and not flipping it in 3 months.
I may sometime in the future see something that compels posting again, but for now it is just plain foolish.
General Electric Co is evaluating strategic options for its venture arm, the company said on Thursday, as the industrial conglomerate looks to cut down billions of dollars in debt and turn around its ailing power unit.
"During this time of transformation for GE, we are evaluating strategic options for GE Ventures to continue delivering returns for our shareholders and partners," a GE spokeswoman said.
GE stock has moved about $2 in the past week or so and anyone of the people holding the $80 billion in short positions lost a lot of money and are now sidelined for good.
Someone or someones big are now buying into General Electric.. Buffet? Ackerman? Paulson?
Add all the good things happening (see below) that Goldman Sacks upgraded today to $15
the March 10th investors meeting which will definitely move the stock
The 1st quarter FCF being at the least down from $2.2 billion a year ago in 1st quarter. which was disaster but got rid af skeletons in their closet
And a projected FCF of $-.2 to $-.6 billion this 1st quarter, the purchase rush all over the world to move into wind power.
GE Haliade is the dominant offshore turbine wind choice, and in wind power GE is getting better situated to make this their 2nd most important dominant industry,
The pairing up with Toshiba for the Asian market and especially Japan.
The recovery of aviation as the vaccines are injected worldwide
The loss of Pratt and Whitney and also Rolls Royce aircraft engines as serious competitors to GE engines (GE is the major 747 engine supplier as of now)
Their new found place dominating the industry with their certified new GE9x engine, and the stability of their healthcare profit center.
That along with Baker Hughes stock worth more every week and GE having at least that $8 billion asset paid for
the serious reduction of all their overall debt
the minimizing of their pension funding necessity that now exceeds the 80% needed (now at lest t 81%
the return to inflation and every 1/2 point adds to the pension fund income $0 billion, the reduction of their exposure and borrowing at GE capital
the the return to a better power generation and far more friendly equipment offering - all this and more is a rel reason to look at a $20 stock coming up.
I personally can see them moving the over $10 billion free cash flow for 2022 and a $30 price coming up in the nearer and not the far future
and there is little to stop it from happening.
All good nes for Genersl Electric.
• GE voluntarily pre-funded $2.5 billion of estimated minimum ERISA GE Pension Plan funding requirements for 2021, 2022, and into 2023.
• GE also repaid $1.5 billion of its intercompany loan to GE Capital.
• These actions reduced GE''s pension deficit by $2.5 billion and reduced the intercompany balance, further simplifying GE. Including today''s announced actions and scheduled maturities in the fourth quarter, GE will reduce debt by approximately $14.5 billion in 2020-including $9.6 billion in GE Industrial debt and $4.9 billion in GE Capital debt-and by approximately $28 billion since the beginning of 2019.
(GE), (Trade)
Any good investor realizes, it is the balance between the two that makes money.
So the quarter ended last night and
WHAT DO WE KNOW?
We know the pandemic is fading and Aviation is rapidly returning.
We know that the government is focused on environment and energy.
We know that GE is deep into all sorts of energy and environmental things (wind).
We know that people are returning to elective surgery and GE MEDICAL will benefit.
We know that GE will spend a lot less on interest payment – maybe as much less as $1 trillion per annum.
We know that GE has solved the GECAS problem – cleverly keeping half ownership and getting cash in the deal.
We know that GE CAPITAL is dead and buried. Reporting will be simpler financials.
We know the REVERSE SPLIT is formally announced – taking away uncertainty.
We know that the next 3 quarter will compare to last year’s 3 quarters and that they were during a worldwide shutdown.
WHAT DO WE THINK?
You can draw lines from the above.
It is reasonable to think GE will return to $100 billion sales volume.
It is reasonable to think that GE will get to at least a $10 billion Free Cash Flow in the next 24 months.
It is reasonable to think that GE had put behind itself years of disappointment and bad deals.
It is reasonable to think that there is a new spirit prevalent amount the GE employees.
It is reasonable to think that the new GE management is razor focused on cutting waste, adding profits, and generally better management.
And it is reasonable to think that going forward GE will start looking at making merger deals.
CONCLUSION
The world will not know anything more until the Q2 results are posted.
I doubt there will be any announcements for the next 4 weeks.
If the results of Q2 are at all decent and the market believes the future will be bright – the stock will move upward and leaves these levels forever.
If the Q2 results are tamped down by Culp, people similar temperament like me will just think it is the last time General Electric is shedding earlier issues.
I for one will believe firmly that the upcoming Q3 and Q4 results will simply be far more exciting.
I can wait….
Citigroup analyst Andrew Kaplowitz sees a "gradual but likely" recovery in GE's struggling aviation business as the bank resumes coverage with a 'buy' rating on the stock.
MARTIN BACCARDAXUPDATED:MAY 14, 2021 7:39 AM EDTORIGINAL:MAY 14, 2021
General Electric (GE) - Get Report shares moved higher Friday after analysts at Citigroup reinstated their coverage of the industrial group with a 'buy' rating, citing a gradual recovery in its aviation business.
Citigroup analyst Andrew Kaplowitz pegged a $17 price target on GE, alongside the reinstated 'buy' rating, amid evidence of improvements across the whole of its business portfolio under CEO Larry' Culp's turnaround plans that could trigger "material upside" in GE shares.
Kaplowitz also cited a "gradual but likely" recovery in GE's struggling aviation business, which posted an overall decline in first quarter profits of 36%, but should get a boost from the Federal Aviation Administration's approval of Boeing's (BA) - Get Report fix for an electrical issue that had grounded around 100 of its 737 MAX jets. Boeing engines are made by GE in partnership with France's Safran SA (SAFRY) .
General Electric shares were marked 1.25% higher in pre-market trading Friday to indicate an opening bell price of $13.13 each, a move that would extend the stock's year-to-date gain to around 21.5%.
Late last month, GE posted stronger-than-expected first quarter earnings of 3 cents per share, as revenues jumped 16.6% to $17.1 billion, but held off on boosting its full-year profit forecast amid the ongoing hit to its aviation business from the global coronavirus pandemic.
1976 American Express started the long term care insurance business.
Years later it sold the portfolio to General Electric.
In 2004 GE sold the portfolio to Genworth Insurance, but was required to keep part of the riskier policies.
By 2018 The Kansas Dept of Insurance was the lead regulator. It’s job was to make sure GE had put adequate reserves aside to match upcoming claims. The insurance portfolio was around $56 billion.
In 2018 "whistleblower Harry Markopolos" released a “bombshell” accusation. He claimed GE was deficient $18.3 billion in the reserves.
GE denied this and Kansas regulators said the claim was false.
Steve Tusa – analyst – went orbital. He accused GE of fraud, overstatements, etc.
The stock crashed from $30 to $12.
The GE board was furious. They did not know if the accusation had merit.
They fired Immelt, then Flaherty, and brought in Larry Culp.
For the next 24 months insurance reserves and claims were murky and unclear to the public.
In 2020 the SEC gave GE a “Wells Notice”. The notice indicated an investigation was planned to see if there was deficiency. I watched the stock crater in minutes of the announcement from above $7 to $6.25. I bought at $6.25 a lot of GE and made a large profit as the stock rocketed back to $7 in a day or so.
Culp did a deal. He paid $200 million to the SECto settle – even though there was no wrongdoing.
REAL NUMBERS.
The actual insurance numbers shown in the Q1 2021 10q SEC report tell a lot more.
On page 26 the insurance liabilities in 2020 were $29,667 billion. In 2021 insurance liabilities were reduced to $29,204 billion.
They further clarified on Note 13 page 39. In that note it said in Q1 GE paid out $866 million in total insurance claims for the quarter. They had in reserves for long term care $16,997 in 2021 – up from $16,934 in 2020.,207 in 2020.
They also clarified that the life annuities (monthly payouts for lifetime) were $9.105 billion down from $9.207 billion in 2020.
It also is obvious that the size of those in the insurance is rapidly shrinking and will be done in just a few years. Finally it now has little to do with GE profits and reporting.
SO, WHERE ARE WE NOW?
GE has set aside way more money than it needs. It is in a secured government=controlled insurance reserve account. GE is finally overfunded and free of regulators, auditors, and government.
The insurance was hidden as part of GE Capital for years.
With the elimination of GE CAPITAL – these numbers are now in clear view.
Culp is rapidly clearing off old GE issues and moving ahead to mergers, profits, growth….
Culp has said he would like to sell the insurance portfolio and it may now be possible.
TUSA IS ALL HOT AIR
Steven Tusa does not know what he is talking about.
He says he holes GE will take the extra insurance payback from the EBITA on its statement.
EBITA is interest, taxes, depreciation, appreciation.
GE is free of this accounting.
Either they are getting back money from long-ago premiums paid by public.
Or they are recovering reserves – money they already own.
If the insurance money recovered is income – it is legitimate.
If it is added capital – it has no tax consequence.
Whatever the case – TUSA does not know what he says is totally wrong.
Even if GE had some sort of incoming money – it would be not that much so far.
CONCLUSION FOR SERIOUS INVESTORS
I hope all the above helps serious investors reading this Board.
It is probably too technical for the “gamers on this board”
AND
Freddie who likes the messages to be limited to a paragraph and kept extremely “one thought” simple.
Me – I like to analyze and make my decision knowing all I can know.
Posted by
Gene
Three weeks from tomorrow
GE will be announcing q3 earnings.
I expect good or possibly GREAT news.
But there are mixed signals out there….
Culp said FCF this year would possibly be $5.00 a share.
On 1.1 billion shares that would me the profit was 5.1 billion.
But the analysts are only protecting .53 cents a share profit for q3.
Q1 was 3 cents ($0.34).
Q2 was 5 cents ($0.40).
Adding 34 plus 40 = $0.74 profit so far for the first half of the year.
If you add the projected analyst profit of $0.53 for q3 profit projection
The three quarters added together would be only $1.26 a share.
That would leave q4 profits projected to be $3.74 a share.
That seems to be totally imbalanced.
A fairer number would taking the remainder of $4.13 and equally dividing it into two parts.
$2.06 for q3
$2.07 for q4.
Simply stated, each quarter would exceed $2.2 billion FCF.
Anyone can easily reason out that GE would really be at 4 times $2.2 billion or $8.8 billion actual 2021 FCF - if property adjusted.
$8.8 billion FCF times 23 times earnings would drive price to $200 a share.
This is very possible and in 3 weeks the stock could "rock".
It all depends on how you crunch the upcoming GE numbers.
I think Culp is making lots of profit.
I think he is still quietly adjusting financials.
Recently it was removing factoring and ending GE CAPITAL.
But he has been spending liberally using $3.5 to end factoring and $1.45 to buy BK Medical.
Total spent so far in 2021 is $5 billion.
And somewhere he spent $8.9 billion in May to pay back bonds.
I suspect this was biopharma money - but it was over a year late than that money had arrived.
So the money trail is very confusing.
Obviously we will know a lot more in 3 weeks when we get q3 results.
A surprised upward profit announcement is very possible.
Gene
April 21 (Renewables Now) - GE Renewable Energy will supply 2.7-MW turbines for three wind projects in India
with a combined capacity of 110 MW under a multi-year framework agreement with CleanMax Enviro Energy Solutions Pvt Ltd.
The renewable energy arm of General Electric (NYSE:GE) will deliver 42 units of its 2.7-132 hardware for “onshore wind hybrid” projects in Karnataka and Gujarat.
The new wind parks will meet the power consumption of various industrial companies, according to the announcement.
GE noted that product design for the particular turbine model takes place primarily at its technology centre in Bengaluru, blades are being made in Vadodara and Bengaluru, while assembly is done in Pune.
The new order comes with a 10-year full-service agreement.
1) receivable factoring is being reduced from 3.2 billion to to $400 million - savings will be 2.8 billion going to Free Cash Flow
2) General Electric has an unused asset of $7.3 billion ownership in Baker Hughes that is available to pay down debt. There are $1.3 billion non recurring charges last year now going to the GE bottom line.
3) pensions: every 1/4% (quarter point) upward inflation interest improves GE pension fund by 2.4 billion. GE is now vested at 81% in their pension fund which is above the 80% normal for industry standards. Since we see interest rates moving upward - every point would benefit GE $10 billion or about another 10% in their pension obligation. That is a real eye opener for improving value and reducing their debt.
employment and plant closings
Not mentioned in this story are the fact that GE has reduced their payroll 15% last year and reduced by 50% from 334,000 employees to about 170,000 employees. That 15% represented a savings of about $12 billion payroll plus taxes. also they closed a lot of US plants moving from about 140 manufacturing facilities in the US to bout 70 plans now.
General Electric's industrial cash flow will be positive in 2020, according to UBS analyst Markus Mittermaier. That is an out-of-consensus view and, if true, would be good news for bullish GE investors.
When 2020 started, General Electric (ticker: GE) management expected to generate between $2 billion and $4 billion in industrial free cash flow. The company provides guidance for the industrial business free cash flow, excluding its lending unit GE Capital from the calculations. GE Capital is treated separately. GE industrial comprises its aviation division, its power generation units, and health care
The industrial free cash flow
One of the most important metrics of the company, industrial free cash flow, came in at $2.3 billion in 2019. This is ahead of company's guidance of around $2 billion, implying that the company has sufficient cash generation to pursue new oppoortunities to enhance shareholders' value.
The company has raised industrial free cash flow guidance above analyts' projections, predicting it to be between $2 billion and $4 billion. This partially reflects GE's expectations of the Boeing 737 Max returning to service around mid-year and profits from selling its biopharma business to Danaher (NYSE:DHR).
ok, now here we go.
I just read the 8 pages 15,000-word Crypto story printed in a section in the
Sunday March 20 New York Times.
It was a deep dive into explaining to me a lot of what Crypto is all about.
And it is far clearer to me now what is happening with people buying General Electric.
Perhaps this will also explain why I can't keep posting on this Board at this time.
There are two universes out there - each approaching life from very different places.
INVESTORS
One crowd is "future investing" and the other crowd is "not seriously investing long term".
As an old-timer, I always thought of investment as evaluating a stock based on
PRODUCT, EXECUTION, and POTENTIAL.
That translates into the Buffet idea of liking what the world is buying (PRODUCT),
believing the management is working for my success (EXECUTION),
and the forward ideas that things will be better (POTENTIAL).
FEW ACTUALLY TRADE THE STOCK
I am still amazed that only 6 million GE shares are traded in a day.
That translate into .00454% stock trading daily which is a meager volume.
It is incredible that so few could depress a company stock price with over 1.1 billion shares out there.
There are about 10 million shares sold short in GE at the beginning of the month
according to Marketplace.
That is not a lot of short sod stock.
Looking at Raytheon, Honeywell, Lockheed and other nearly defense similar stocks -
they have about the same percentage of short stock.
In fact, GE is little better than those others.
Obviously, most people and institutions (70%) are holding, not selling.
CRYPTO
I just waded through crypto terms like Bitcoin, Ethereum, blockchain, crypto exchange,
crypto compiled, minted, tokens, Web1, Web2, Web3, DOA (decentralized autonomous organizations), Friends With Benefits, discord chat rooms, tokens, platforms, NFT (nonnegotiable tokens), Metamask, whitelisting, OpenSea, metaverse, Axies, Helium, DeFi, Tradfi, Stablecoins,Tether, USD Coin, and a
lot more terms way too complicated to post.
While I do not intend to comment much on crypto because I suspect there is large crowd
here that is into crypto, I will make a few observations (purely my thoughts).
Crypto is based on a giant social network with an active populist effort to join in.
It is obvious to me it not clearly explained nor understood by seasoned old-fashioned investors.
The actual investment in all sorts of crypto is unproven, speculative, hopeful, futuristic, and Ponzi
in pyramid, not safely investable, hard to redeem, and certainly different than what an investor
like me would relate to.
There is a world out there that cannot understand my logic in posting.
They are loud, abusive, can say hurtful things like T Edison who said last week I was posting
"100% bull_ _ _ _" -and that takes the wind out of my sails.
And there are at least a dozen others or more trolling this board with negative, abusive comments.
They far outweigh the positive posts every day.
These posters NEVER give new facts or post things I can learn from.
They freely give HATE COMMENTS and one of the worst is Richard Irvine who posts hourly.
And amazingly everyone is now a large GE investor.
Many say they now own at least $100,000 to $2 million in GE Stock.
If that is true, you would think they would want to protect their investment by learning
everything they can find out about the company.
You would think they would be smart investors looking for any news.
You would think they would date the General Electric historical improvements to the
positive last 24 months.
Definitely forget anything done before Culp took over in October, 2018 as worthless news.
My father-in-law was an excellent attorney who said:
"If three men say you are drunk and you think you have not had a drop to drink -
you better pull over and sleep it off."
That moral is clear.
Listen to others. Try to get the truth.
This post is in answer to the many others who want me to post more and that is not reasonable.
A board like this filled with detractors.
They have a right to their opinions and so do I.
The GE Board is not a good place to post facts and give clear reasoning.
I really cannot research every sentence I post - but most are on target.
You cannot mute all the detractors. Certainly they have ways to get through.
But it is important to realize that General Electric will keep reporting better numbers
and more wins over time and everyone invested long term will make a lot of money.
Think of it as an investment - the same as buying a house and not flipping it in 3 months.
I may sometime in the future see something that compels posting again,
but for now it is just plain foolish.
So, I am just pulling over to sleep it off.
gene