General Electric Stock - Should We Buy GE Stock - is $GE Stock a Good Buy Today? | Summary and Q&A

TL;DR

GE's revenue and free cash flow have been declining over the years, but recent positive free cash flow and efforts by the CEO to clean up the company are promising. However, with SEC troubles and potential lawsuits, the current stock price of $11.20 does not provide enough margin of safety.

Key Insights

• 🤘 GE's revenue has been in decline since the financial crisis and shows no signs of recovery.
• 💼 Markopolos' accusations against GE seemed exaggerated, comparing it to Enron and Bernie Madoff, which are not comparable cases.
• ❓ GE's recent fine for inadequate disclosures does not make the company completely uninvestible but highlights the importance of transparency.
• 🚟 Larry Culp's efforts to clean up the company, including addressing pension liabilities and reducing debt, are positive signals.
• 🥶 Debt reduction and positive free cash flow in the past 12 months show some improvement in GE's financial situation.
• 🧚 The fair value of GE stock is estimated to be around $12 per share, but the current stock price does not provide enough margin of safety.
• ✳️ Potential SEC troubles and lawsuits create additional risks for GE investors.

Transcript

hi i'm jimmy in this video we're going to look at general electric ticker symbol ge so first we're going to break down the basics of ge's business and then we're going to look at some recent news that has come out and then finally we're going to see if we could value ge stock using discounted free cash flow and then hopefully we can use this analys... Read More

Questions & Answers

Q: What are the main segments of GE's business?

GE breaks its revenue into two main segments: GE Capital and GE Industrial. The industrial segment can be further divided into aviation, healthcare, renewable energy, and power.

Q: What was the recent news about GE and its whistleblower, Harry Markopolos?

Markopolos accused GE of being a fraud, but his comparison of GE to Enron and Bernie Madoff seemed exaggerated. GE was fined $200 million for inadequate disclosures, but it does not compare to the severity of other fraud cases.

Q: Who is GE's current CEO and how is he trying to improve the company?

Larry Culp became GE's CEO in 2018 and has allocated $4 billion towards pension liabilities and debt reduction. This move is seen as positive, as GE's pensions have been underfunded for a while.

Q: What is the fair value of GE stock according to the discounted free cash flow calculation?

The fair value of GE stock is estimated to be around $12 per share. However, considering the risk factors and current SEC troubles, it may not provide a sufficient margin of safety.

Summary & Key Takeaways

• GE's revenue has been declining since the financial crisis in 2008 and has not recovered since then.

• Free cash flow was negative from 2016 to 2018 but turned positive in the past 12 months, with $2.8 billion in profit.

• Recent news includes GE being fined $200 million for misleading investors, but the inadequate disclosures are not comparable to fraud cases like Enron or Bernie Madoff.