Why General Electric Stock Is Cheap Right Now
The prize ahead for General Electric (NYSE: GE) investors is significant if CEO Larry Culp can achieve his aim of generating margin improvements across all of its industrial businesses. In a sense, all GE needs to do is to get to the kind of margins enjoyed by its peers and the stock will have significant upside potential. Here's why.
One way to value GE is to break out the businesses separately and try to compare them with what their direct peers trade on. To simplify matters, let's conservatively assume GE Capital (the company's finance arm) is worth nothing, and focus on its respective industrial businesses.
The central argument is that its peers in the renewable energy and healthcare sectors have higher valuations than GE's segments in recent times, and if GE can match their operational performance, then why shouldn't GE's business be valued on a similar level?
Source Fool.com
