Here's the Real Reason General Electric's Stock Is Soaring in 2020

By now most investors will know that General Electric (NYSE: GE) stock rose by a double-digit percentage on the day of its fourth-quarter 2019 results, but the question is why did it do so? Moreover, is the reason behind the rise also going to carry forward into 2020? Let's take a look at what's going on.

GE's industrial free cash flow (FCF) generation has been central to the bull-and-bear debate in recent years. The bear case usually involves pointing out GE's anemic FCF generation and then comparing it with the price-to-FCF multiples of industrial peers like United Technologies, Siemens, and Honeywell, the rationale being that industrial conglomerates should have a diverse set of businesses generating earnings and cash flow throughout the cycle. On this basis, GE is a very expensive stock in which to invest.