General Electric Company (GE): Billionaires are Betting Big

Page 1 of 2

BERKSHIRE HATHAWAYGeneral Electric Company (NYSE:GE) has attracted the interest of various big-name investors in the hedge fund industry. Part of the appeal of GE is its diverse product operations and international presence. GE’s key segments include aviation, healthcare, financing and energy. Aviation and healthcare account for around 15% of revenue each. The capital and energy segments are GE’s largest revenue contributors, each accounting for around 30% of company revenues. At the end of the third quarter General Electric had a plethora of billionaires owning the stock, including Warren Buffett, Ken Fisher and Steven Cohen (see Warren Buffett’s new picks here).

Generally speaking, GE is showing positive traction and could regain much of the market value it has lost over the last five years. The diversified products company is down 40% over this stretch, while the S&P 500 Index is relatively flat. Recent quarterly results met estimates but also managed to show order growth of 15% year over year for GE’s energy division. The rising global energy demand, including the initiative toward fossil fuel alternatives is mostly what’s behind this order growth.

Aviation is another key segment for GE that has been weak since 2009, but it is showing signs of recovery due to an increase in commercial air traffic. Last quarter total orders for the aviation segment were up 14%, with commercial engines up 14% and military engines up 15%.

On the whole, revenues are expected to be up 2% in 2012 and then 4% in 2013, on the back of long-cycle energy and technology business growth. We are also encouraged by GE’s international presence, with more than 50% of total revenue coming from emerging markets. These major markets include China and India, which have been buying up locomotive and power turbines, among many other key transitional products. With nearly $85 billion in cash on hand, GE should be able to continue making key acquisitions and have no problem paying its current 3.5% dividend yield, which is an annual payout of only $8 billion.

Other major diversified tech companies include Siemens AG (NYSE:SI), United Technologies Corporation (NYSE:UTX), 3M Co (NYSE:MMM) and The Boeing Company (NYSE:BA). Siemens is an integrated tech company that also pays one of the highest dividend yields in the industry at 3.6%. The payout is only 50% and Siemens also boasts the highest 5-year earnings expected growth rate of our five major diversified tech companies at 60%. This, coupled with its industry-low 11.5x forward P/E, and a 0.9x P/S makes Siemens one of the best opportunities in the space at the moment. Siemens also called billionaire investor Ken Fisher its top fund owner in 3Q (check out Ken Fisher’s newest picks).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!