MAJOR PAPERS:

• After being downgraded by Moody's, The Wall Street Journal reported that MBIA Inc (NYSE: MBI) will have to make $2.9 billion in termination payments and put up an additional $4.5 billion in collateral on agreements called Guaranteed Investment Contracts. As a result the firm is selling municipal bonds to raise cash.
• Anheuser-Busch Companies Inc (NYSE: BUD) introduced a new business plan to help thwart a takeover by rival InBev. As part of its plan, The Wall Street Journal reported its intention to reduce headcount, raise prices and buy back more of its shares.
• In an attempt to withstand the economic slowdown, the Financial Times reported that Siemens AG (NYSE: SI) announced plans to cut 17,200 jobs worldwide. Approximately 6,400 job cuts will be in Germany with a third more, elsewhere in Europe.
• The Financial Times also reported that Citigroup Incorporated (NYSE: C) is planning to change its bonus system for hundreds of its top managers, in an attempt to increase cooperation and reduce competition within the company.

• John Varley, the CEO of Barclays Plc (NYSE: BCS), said the GBP4.5B rights issue answered naysayers, and said in an interview with The Sunday Telegraph that extra financing will not be necessary.

Newspaper wrap-up: Anheuser-Busch to cut jobs and raise prices originally appeared on BloggingStocks on Mon, 30 Jun 2008 08:00:00 EST. Please see our terms for use of feeds.

General Electric Company's (NYSE: GE) Healthcare segment is worth between $24.1 billion and $59.1 billion, according to my calculations.

GE Healthcare, which constituted 10.1%, 10.2% and 10.0% of GE's consolidated revenues in 2006, 2005 and 2004, respectively, manufactures, sells and services medical equipment including equipment for magnetic resonance (MR), computed tomography (CT), positron emission tomography (PET) imaging, x-ray, patient monitoring, diagnostic cardiology, nuclear imaging, ultrasound, bone densitometry, anesthesiology and oxygen therapy, neonatal and critical care, and therapy.

I think GE Healthcare is a mixed bag for GE. Its technology is excellent and it has good relationships with those in the health care community. However, its revenues shrank because of regulatory problems -- the federal government cut reimbursements to nonhospital imaging centers, which bought less equipment from GE. I am wondering whether such regulatory challenges will impede GE Healthcare's growth in the future -- or whether new products can help revive the growth.

Assuming that GE Healthcare generates net income of $2.2 billion in 2007, here are the range of valuations based on the Price/Earnings ratios of the following peer companies:

• Siemens AG (NYSE: SI) P/E: 27.4. $59.1 billion
• Koninklijke Philips Electronics (NYSE: PHG) P/E: 11.1. $24.1 billion

This is a very wide range of valuations and I am not particularly comfortable with this result so if you have any suggestions, please comment.

Conclusion: Does GE trade at a conglomerate discount?

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric shares and has no financial interest in the other securities mentioned in this post.

Breaking down GE Healthcare: A BloggingStocks series originally appeared on BloggingStocks on Mon, 30 Jul 2007 12:17:00 EST. Please see our terms for use of feeds.

Another Cramer pick in Europe: Siemens AG originally appeared on BloggingStocks on Wed, 18 Jul 2007 20:00:00 EST. Please see our terms for use of feeds.

General Electric Co.'s (NYSE:GE) stock has had a nice run recently. It is up 10% over the last three months, outpacing the S&P. However shares in Its major rival, Siemens AG (NYSE:SI) are up 30% despite a bribery scandal that cost both its chairman and its CEO their jobs.

With the sales of its plastics unit, investors want to believe that the company will dump some of its dogs and focus on businesses that have high margins and good growth prospects. GE management continues to insist that its forays into India and China will help pump revenue in the years ahead.

The concern about GE that lingers is that it is not a company, but rather it is a collection of companies which have little to do with one another. The structure disguises the real value, or lack thereof, in each part.

On April 13, GE announced first quarter earnings. Net was up 2%, hurt in part by sub-prime mortgage issues at the company's financial services business.

Short interest in GE's share rose 6.4 million to 60 million shares between May 15 and June 15. Perhaps the market realizes that most of GE's recent gain was on rumors that the company might be broken into two or more pieces. Barring that, GE will slip back into a pattern of meeting modest earnings. But, that will be the extent of it.

GE doubters increase short interest in conglomerate originally appeared on BloggingStocks on Fri, 22 Jun 2007 10:47:00 EST. Please see our terms for use of feeds.