Industrial power generation equipment GE Vernova Inc. (NYSE:GEV) has consistently been one of Cramer’s favorite stocks. For more than a year, the CNBC TV host has maintained an optimistic tone on the firm. Among the reasons Cramer likes GE Vernova Inc. (NYSE:GEV) include its stable delivery timelines for nuclear reactors and its exposure to the AI infrastructure buildout courtesy of its power generation business. In his morning appearance on August 24th, Cramer discussed the broader negativity surrounding the data center sector and how GE Vernova Inc. (NYSE:GEV) was suffering:
“I happen to like the stock of GE Vernova, okay. Well you know what, if you listen to the political, GE Vernova is a great short. But is it a great short November 15? I don’t think so. Because you’re not going to cancel the order. Because this is progress, this is what happens. . .GEV is a great company. . .”
The orders that Cramer is talking about were also visible in GE Vernova Inc. (NYSE:GEV)’s second quarter. During the period, the firm reported a whopping $6.4 billion in working capital benefit from customer down payments which pushed its free cash flow to $5.1 billion for an unbelievable 2,532% annual growth. The impact of the orders on GE Vernova Inc. (NYSE:GEV)’s cash flow guidance was also visible as the firm bumped the full year guidance to $11.5 billion to $12.5 billion from the earlier $6.5 billion to $7.5 billion.
Yet, while the orders might be flowing in, it doesn’t mean all is well at GE Vernova Inc. (NYSE:GEV). During its second quarter, the firm’s earnings per share of $2.47 fell short of analyst estimates. Similarly, EBIT of $653 million missed analyst estimates of $981 million, to indicate that the costs of catering to its orders were having an impact on the bottom line. Subsequently, tailwinds from its gas turbine ramp and grid storage orders along with updates to data center demand, could prove to be catalysts for GE Vernova Inc. (NYSE:GEV).
Hedge fund interest in GE Vernova Inc. (NYSE:GEV) also appeared to taper down in Q2. During the period, 106 out of 1,006 funds part of Insider Monkey’s database had held a stake in the firm. This marked a drop over the 118 out of 1,022 funds that had held a stake in Q1. However, major movement came from Fisher Asset Management, which bumped its stake by a whopping 90,037% to $4.1 billion. Forward P/E of 33 is roughly in line with peer ETN’s 30, while short interest as a percentage of float is 3%.
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Disclosure: None.
