June 13, 2017
Yesterday, I was invited on CNBC's "Closing Bell" show to discuss my take on General Electric (GE). Now that CEO Jeff Immelt is stepping down, GE has been making headliens lately. As always, I thoroughly enjoyed my time on Closing Bell, and we covered a lot of ground in just a few minutes. So if you didn't catch me on CNBC yesterday, you can get caught up by visiting the CNBC website or by clicking on the player below.
If you're not able to view the video at this time, here's what I talked about in a nutshell…
Unfortunately, I don't expect that General Electric (GE) will hit the gas anytime soon, even with a new CEO. This quarter, sales are expected to fall 13.3% and earnings are expected to plunge 51%. To add insult to injury, analysts have cut this quarter's consensus EPS estimate by 19.3% over the past few weeks. This suggests that General Electric will struggle to meet analysts' estimates going forward.
As a multinational, General Electric is getting paid in erroding currencies. When you have a strong dollar, as we do now, multinationals struggle. Now, once the dollar starts to weaken, I may change my tune. In the meantime, though, General Electric is lost. Until the company starts to turn around its sales and earnings, I don't want to go near it.
So while GE may have a nice dividend yield, I do not recommend buying it at this time. It does not appear to be a bargain. In fact, in my Portfolio Grader screening tool, GE has a D-rating overall.