General Electric Co. (NYSE:GE), a once-proud American icon, has fallen on hard times. The much ballyhooed investor day flopped, at least according to financial markets, which punished the stock last Monday and Tuesday.
Many investors are wondering if they should buy.
Not unless you have money to burn and you like playing games where the odds are heavily stacked against you.
GE’s breakup value is only $11 a share, according to my back of the envelope calculations – and even then just barely. That means the stock could drop another $7.28 per share, and that the once-proud conglomerate will lose another $95.24 billion in market capitalization.
The company should be on deathwatch.
Contrary to what Wall Street would love to have you believe, GE is NOT a turnaround play.
- Shares are down 5% after CEO John Flannery’s plan for a “more focused” company fails to excite… well… anybody.
- GE’s dividend got a 50% haircut that’s the worst (and largest) of any U.S. company outside of the financial crisis.
- GE’s shares are trading at levels below where they traded 20 years ago, and have lagged the S&P 500 by more than 50% this year alone.
CNBC’s Jim Cramer even went so far as to call investing in GE “one of the biggest mistakes of my career” saying rarely has he “felt this stupid.”
Forget about the complicated market analysis, the PhD in rocket science or advanced statistics Wall Street would have you believe are important to the pursuit of profits. Instead, take your cue from where the money is moving, pick your price and get on board when the timing is right. You know when you see a very specific “X” pattern. Click to watch…