As shares of General Electric sink after slashing its dividend – four market experts weigh in on how investors should trade the stock<\/b>
\nIt’s looking dim for shares of GE.
The former industrial giant hit its lowest level in a nearly decade on Tuesday \u2013 briefly breaking below $10 – after the company cut its dividend to just one cent per share.
Here’s how four market experts are trading the move:
\u00b7 Jack DeGan of Habor Advisory says that although the dividend cut was a necessary decision for the company, many of its investors will pay the price . \u00a0\u00bb The street is not willing to wait for the 2 to 3 years for Mr Flannery’s plan to unfold. That’s just too long of a horizon for most investors to be patient,\u00a0\u00bb he explained. \u00a0\u00bb There are [a] very large percentage of shares owned by retired employees and individuals [that] were relying on the dividends.\u00a0\u00bb
\u00b7 Stephanie Link, Head of Global Equities Research at Nuveen believes that even though the stock has been under significant pressure it still has potential for a turnaround. \u00ab\u00a0It trades at ten multiple and okay fine if you think those numbers have to come down,\u00a0\u00bb she said.\u00a0\u00bb \u00ab\u00a0It’s still at a really reasonable valuation and you’ve got this leadership that is actually putting a game plan in place.\u00a0\u00bb
\u00b7 Josh Brown, CEO and Co-founder of Ritholtz Wealth Management, warns that from a technical perspective there’s no reason why individual investors should be buying General Electric. \u00ab\u00a0This is a stock that on the charts has shown you absolutely no indication that it’s turning,\u00a0\u00bb he explained. \u00ab\u00a0There has never been any indication that the downtrend, which is now years, is showing any fatigue.\u00a0\u00bb
\u00b7 John Inch, Analyst at Gordon Haskett, says that GE’s tie up with the SEC and nearly tapped out dividend suggest more problems could unfold in the future. \u00ab\u00a0Retail investors really should not be owning a name that is under accounting investigation and the company took an equity capital raise off the table,\u00a0\u00bb he warned. \u00a0\u00bb We think GE Capital is going to owe billions of dollars more in the future, we’re just starting to see the covers start to unravel here.\u00a0\u00bb
Bottom Line: GE has a number of critical issues to work through before it looks attractive again. Investors should steer clear of the stock for the time being.<\/p>\n

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Similarity rank: 3.2<\/div>\n

Sentiment rank: 0.2<\/div>\n

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