GE is a wounded publicly traded company with big debts and huge pension obligations. It is currently selling at a historic low of ~$13.50/share but still has annual total sales exceeding $100 billion and some profitable sub divisions. When wounded giants are bleeding in the water they attract investment banker sharks and their bloodless acquisition, merger and liquidation specialists. IMHO GE is a takeover target whether its management is willing or not. Suspect the sum of its parts minus liabilities exceeds $30/share. Any Freeper thoughts?
RE: Suspect the sum of its parts minus liabilities exceeds $30/share. Any Freeper thoughts?
GE was trading at $36/share two years ago. A year later, they dropped to $18/share and this year, they dropped even further to as low as $12/share.
If you believe that they can recover ( like Alcoa did after they got kicked out of the Dow ), then even if they are worth less than $30/share ( say, $20/share), it’s still worth the risk at the price they are trading at right now.
Remember Citigroup? This company went from trading at over $60/share before the mortgage crisis, to an almost bankrupting $2/share. They had to be rescued by Uncle Sam and for many years, they were only trading at less than $4.00/share. Then, they did a reverse 10 to 1 split and traded at $45/share or something close to that price.
Today, they are trading at over $65/share once again. If you bought them at $2/share during the most pessimistic time, you would have tripled your money (taking into account the 10 to 1 reverse split ). But then, you would have to wait for a decade to reach that price.
I think with GE, one has to be REALLY PATIENT similarly.
I have bought into it in the last 6 months. They got down to about $9 during the big 2007/2008 fiasco. I’m of the opinion that the hard businesses were devalued by the financial plays that Capital took on. The sell offs I think took care of the majority but not all of that. The remainder and the failure to focus on cost controls is what has taken the more recent toll.
I’m not sure I’d go up to $35, but I definitely think the hard assets are worth more than the $13-14 they are currently at.