General Electric Company (NYSE:GE) added to its diversified operational base Monday by agreeing to buy oil and gas services company Vetco Gray for $1.9 billion from a private equity group. Vetco, which is expected to post 2006 revenue of $1.6 billion, provides drilling, completion, and production equipment for oil and gas fields. GE's purchase of Vetco, with about 5,000 employees, essentially doubles the size of GE's oil & gas business, to about 10,000 employees. GE said it expects demand for energy services to increase more than 50% by 2025, with much of that robust demand coming from emerging market countries. Shares of GE were slightly lower Monday, down about 10 cents to $35.45 in afternoon trading.
Investment Analysis: GE is a low-risk stock suitable for most investors whose portfolios contain stocks. If your portfolio needs a diversified, blue-chip stock, consider buying a full position of GE at this level, about $37.45. Buy 100 shares if you typically buy 100 shares, 500 if you buy 500.
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