General Electric Company (GE), Lufkin Industries, Inc. (LUFK), And 3 Energy Plays for a Diversified Portfolio

When buying and selling stocks, I ask myself how I can get an advantage over market conditions, corporate malfeasance, or economic fluctuations? One way to get ahead is by diversifying a diversified portfolio. Instead of buying a single technology stock, buy a semiconductor, a social network, a small cap internet security firm, and a bellwether blue chip. If you do adequate research, slowly add to your position, and sell high, then your return on investment will be better than if you had bought a single technology stock.

For a bellwether blue chip in the energy sector, General Electric Company (NYSE:GE) has a lot to offer. There is hard evidence that the U.S. is moving toward energy independence — and General Electric Company (NYSE:GE) will benefit from this shift. There is not enough room on the page to list all of General Electric’s energy projects. However, by buying General Electric Company (NYSE:GE), you are automatically diversifying your energy portfolio, since it is involved, in some form or fashion, with nuclear, renewable, water, oil, gas, and thermal energy.

Its most recent maneuver came just this month, with the announcement that General Electric Company (NYSE:GE) has acquired Lufkin Industries, Inc. (NASDAQ:LUFK), an energy equipment maker, for $33 billion. One of the talking points put out by Lufkin Industries, Inc. (NASDAQ:LUFK) is that this move makes sense because it builds upon General Electric’s 2011 acquisition of the Well Support Division of the John Wood Group PLC (LON:WG). If anything, these acquisitions are a sign that America will be producing more of its energy, and General Electric Company (NYSE:GE) is positioned to significantly capitalize from this quest for energy independence. One interesting point, is that General Electric was the leader in wind energy for 2012 according to BTM Consult. Some of this success can be attributed to expiring tax credits in the US. And yet, wind energy was responsible for a 39% drop in profits in General Electric Company (NYSE:GE)’s clean energy sector in the latest quarter. But this is just part of the picture. General Electric’s diversity allows it to benefit from trends and weather downturns. The future for America’s energy independence, at least for the foreseeable future, appears to be in shale. Oil and gas, not clean energy, will drive this company’s growth.