If you ask me, General Electric (NYSE: GE) is being priced as if the Cloverfield monster will be attacking Wall Street any day now. Thank goodness that an insider apparently thinks that GE is a great buy at these levels.
According to the AP, vice chairman Michael A. Neal purchased 35,000 shares this past Wednesday. The price? $29.99 per share. Not bad. At $29.99, GE's stock sports a nice, juicy dividend yield of 4.1%. I was pretty happy when I read this piece of news because, frankly, I've been wrong about GE. As I wrote recently, I thought GE would have been trending higher by now. The exact opposite has happened. So, it's kind of cool that an insider is buying. Of course, I'm not naive or utterly seduced by insider transactions. They are definitely important enough to keep tabs on, but let's face it, GE is in a vicious downtrend, and I understand that the stock might be haunting these levels for a while to come. The economy and the markets are, to understate the fact, somewhat spastic these days.
Here's another thing about the GE story I find incredibly interesting. A Bloomberg article says that GE's shares haven't existed with a dividend yield over 4% since 1984. That's more than 20 years ago. Again, there's nothing in the rulebook that says Wall Street institutions have to start buying now just because of GE's super-income story. As far as I'm concerned, though, GE's stock has to be in a good position. The insider buying may or may not help, but that yield is objective, attractive, and certainly sustainable. I'll continue to hold my GE trade, no matter what the technicals may tell me.
Disclosure: I own GE; positions can change at any time.
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Reader Comments (Page 1 of 1)
6-14-2008 @ 5:39PM
Bruce E Warnock said...
The stock will shoot upward also when the Board shows CEO Immelt the door. He has had long enough to preside over this great company and oversee the stock decline from $60 in the year 2000 to $29 today.
The least the Board should do is separate the position of CEO and Chairman of the Board so the CEO will at last have a "boss" to report to.
I cannot imagine that Jack Welch would have let this go on so long under his tenure.
We are retired folks and have a good position in GE.
6-14-2008 @ 9:50PM
Dan Barnett said...
While GE at $29 is scary, the company is solid with a solid set of products.
And while we are out-of-step with alot of the published opinions, some times you just have to be the first one to take the step. (Though it is nice to see a few others out there with me.)
6-15-2008 @ 5:17AM
charlie said...
i WILL NOT BUY ANYTHING MADE BY GE UNTIL THEY STOP SELLNG GOODS TOOUR ENEMY THAT IS KILLING OUR AMERICAN SOLDIERS. I HAVE SOLD THE SHARES I HAD AND DO ALL I CAN TO OTHERS TO DO THE SAME.
6-15-2008 @ 5:35AM
j gormley said...
GE is a fine companybut the Tech Charts are sick. Anyone buying it should wait for the charts to show a turnaround.
http://139.142.147.19/StockChart_ImageOnly.dll?cus=0&co=ask&i_chart=0&inm=5&ind=2&idx_sym=&sb=ge&cn=us&size=1&ind2=-12&inm2=-1&ty=1&sca=1&chk_mov=on&mov1=50&mov2=100&mov3=200&chk_boll=on&boll=15&lin=0&chk_vol=on&chk_obv=on&chk_rsi=on&rsi=7&chk_sto=on&sto1=15&sto2=5&sto3=5&chk_wil=on&wil=12&chk_macd=on&macd1=12&macd2=25&macd3=9&roc1=16&roc2=8&mfi=14&rsc_sym=&ref_rate=180
Wait for the RED line to crossover the 100 ema line before even considering a buy.Learn some TA or investing will cost you dearly.
6-15-2008 @ 12:09PM
Drew Peacock said...
Psst..... GE SHOULD be attractive now....it's been in the can for so long .... but it still looks like Jeffery can not find his way....and HE needs to be CANNED!
So we got a high yeild......big deal. The stock price is totally CRAPOLA
6-15-2008 @ 1:33PM
william lindblad said...
I don't own any, nor do I intend to but it is a solid company with ownership of a lot of useful tech.
In short, they are not going under.
6-15-2008 @ 8:33PM
Snoburd said...
This market is nuts! When defense makes sense, heath care, utilities and GE get smacked. Look at the dividends of ED and PFE. Both are solid companies. The General has five stars but is simply a victim of the "reward me now" mentality.
6-16-2008 @ 3:14PM
Tattletale said...
Agree with Drew......Immelt should be canned. Another guy livin high on the hog, and doing nothing to deserve it.
6-19-2008 @ 4:17PM
jerry h smith said...
THE CEO NEEDS TO BE CANNED. HE HAS LET THE STOCK AND STOCK HOLDERS GO DOWN THE DRAIN SINCE HIS TAKE OVER.
WHAT IS WRONG WITH THE BOARD OF DIRECTORS THAT THEY DO NOT SEE THIS.
MAYBE THEY SHOULD BE CANNED ALSO.
9-25-2008 @ 7:47AM
J.Martin said...
should I hold GE stock or sell. I've had them for 47 years