General Electric Company (NYSE:GE), continued to witness strong insider activity since we last reported James Rohr’s purchase last week. In fact, the company saw four different insiders purchase its stock in nine separate transactions over the last three months. The latest move was made by Jeffrey Immelt, Chairman and CEO at General Electric Company (NYSE:GE), who acquired last Monday -Jan 27th– 40,000 shares of Common Stock for $25.04 apiece. He now holds more than 1.85 million shares, worth more than $47 million.
Another purchase that was reported just after our last article on General Electric Company (NYSE:GE) was published was that of William Beattie, Board Director. The insider bought 2,000 shares at a price of $25.47 per share. Moreover, Beattie has already purchased stock in January. On Jan. 21st, he had already added 2,000 shares to his portfolio for $26.23 each. Even further, the Director had also made an acquisition two months earlier. On Nov. 21st, 2013 he had acquired 5,000 shares –in three separate transactions- for $26.88 per share.
After all of these moves, William Beattie owns –indirectly, through trusts and holding companies- almost 47,200 shares.
In addition, (we had already reported) on Jan. 21st, James Rohr, Board Director, acquired his first 10,000 shares of General Electric Company (NYSE:GE)’s Common Stock for approximately $300,000. In two separate transactions, the insider paid $26.19 per share for the first 4,200 and $26.18 per share, for the remaining 5,800. Since he just started a position in the stock, these 10,000 shares are all that he owns.
But, what are these insiders betting on (besides taking advantage of the relatively low price of the stock)? It looks to me like this stock offers a value proposition: stability, a moated business, decent growth projections, a generous dividend yield (usually above 3% of the stock price), and a valuation below its peers’ average (at 17.9x P/E, versus an industry mean of 20.1x). And, although opinion among analysts is quite divided in relation to this company (about half of them rate is as a “buy” case, and the other half, as a “hold” case), the balance is generally tilted towards a buy or overweight recommendation (Barrons/WSJ, Morningstar, Yahoo! Finance).
In addition to analysts and insiders, hedge funds also like General Electric Company (NYSE:GE). Most of the top hedge funds investing in the company declared on their last 13F filings that they had increased their stakes in the stock. For instance, Phill Gross and Robert Atchinson’s Adage Capital Management augmented its holdings by 8%, and now owns 14.79 million shares, which comprise about 1% of its total equity portfolio. John A. Levin (Levin Capital Strategies) seems to feel even more bullish, since he last upped his bets by 320%, to 10.87 million shares –which account for 4.4% of the value of the fund’s total equity portfolio.
D. E. Shaw, fourth largest bull, also declared having augmented his position by 10%, to 9.385 million shares. Furthermore, Jim Simons’ Renaissance Technologies started a position in the company during Q3, with 6.5 million shares.
Finally, there´s Warren Buffett’s Berkshire Hathaway, which holds 588,900 shares of the company, appraised at more than $15.2 million. Although his stakes are not high in relation to his total equity portfolio´s value, tracking Buffett’s holdings is never a bad idea.
On the other hand, Ken Fisher’s Fisher Asset Management, the largest hedge fund bull, slightly decreased his stakes at General Electric Company (NYSE:GE) over the fourth quarter of 2013 (same as in the previous quarter). After getting rid of approximately 310,000 shares, Fisher’s fund still owns 29.7 million shares, about double its closest follower.
Disclosure: Javier Hasse holds no position in any stocks mentioned