Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Don't y'all think we should stop neglecting GE and add them to the RM port? GE seems to be one of the most successful businesses out there, yet not part of the port.
Also making their own rules are HD and NOK.
BRCM is a possible future RM, but I still think it is too early to tell. (This, however, hasn't stopped me from jumping on the BRCM bandwagon in my roth.)
Fool on,
-T
Print the post Back To Top
No. of Recommendations: 5
Let's look at GE ...

Dominant Brand
They are definitely dominant. They have a market cap of $477 Billion.

Repeat-Purchase Business
Definitely. People need to buy new appliances and companies need their equiptment.

Convenience
Their stuff is sold everywhere. NBC is on most TVs (unless you have a satellite Dish...)

Expanding Possibilities
GE is a diversified industrial corporation whose products include appliances, lighting products, aircraft engines and plastics. GE also provides television, cable, internet, distribution, engineering and financial services. With internet and TV, they have a lot of room to expand.

Do my friends know about the company??
Yeah, most people watch NBC. TV polls shows us that. Plus, their products include lamps and other lighting products, major home appliances, industrial automation products and components, motors, electrical distribution and control equipment, locomotives, power generation and delivery products, nuclear reactors, nuclear power support services and fuel assemblies, aircraft jet engines, plastics and a wide variety of high-technology products, including products used in medical diagnostic applications.

Your Familiarity and Interest
"We bring good things to life" - I think everyone has heard of GE. Plus, they own NBC/CNBC. 'Nuff said.

Sales Growth of atleast 10% Year over Year
1998 to 1999 - 7.03%
1997 to 1998 - 12.74%
1996 to 1997 - 12.73%

Gross Margins above 50%
1999 - 65.8%
1998 - 63.5%
1997 - 59.3%

Net Profit Margin above 7%
1999 - 13.8%
1998 - 13.5%
1997 - 12.6%

Cash No less then 1.5x Total Debt
Debt is the killer here. $66.3 Billion dollars of debt for 1999. That's up about $6 billion from 1998. The debt is 14% of their market cap. Not too bad except that they are trading at more than 10 times book value.

Cash to Long term debt ratio
Cash/LT Debt = 1:11
Cash/share = $1.86
LT Debt/share = $20.28

Efficient Use of Cash
Sales keep growing. Debt keeps growing. Tough call.
Print the post Back To Top
No. of Recommendations: 0
If interested, I just recently completed an RM Ranker run on GE's 3Q99. (Post number 5017 on this board.)

I believe it definitely deserves consideration, but you'll see that it does come in as
only a 2nd Tier RM and in fact has dropped from it's
50-point score in 2Q99.



gugie

Print the post Back To Top