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Posted on 9/27/18 at 9:21 pm to TigerintheNO
quote:
does the 8% rule include the dividend? If over the course of the year the stock price drops 10% from your purchase price, but the stock pays a 5% dividend, is the 8% rule in play?
Good question. The IBD 8% rule primarily deals with price action and doesn't consider dividend income. When calculating your total returns, you'd take the dividends into account. But just like a 52 week high or low, they're just looking at the price of the stock.
Here's another reason for the 8% rule, in addition to how difficult it is to recover from a heavy loss (a market underperformer has to turn into a market outperformer):
IBD market research shows that 40% of all big winners return to or near their pivot points after breaking out. That same research shows that far fewer go on to big gains once down 7-8% from the pivot, however. Don't sweat the few that do bounce back. In the long run, you'll do better by consistently keeping your losses small.
Posted on 10/1/18 at 7:45 am to tiger81
I haven’t been paying close attention, but didn’t see CEO Flannery’s removal coming so soon. Especially after the Board sat on their hands for years while Immelt destroyed the company.
Posted on 10/1/18 at 9:00 am to ynlvr
Investors welcome it
Posted on 10/1/18 at 9:10 am to castorinho
Definitely a good move. Culp is a deal maker. And lord knows GE needs a new deal maker after a decade of being high and selling low.
Posted on 10/1/18 at 9:17 am to ynlvr
Watch ATHN to see the Immelt effect in action again. I don’t understand that move for ATHN either.
Posted on 10/1/18 at 8:23 pm to ynlvr
Switching sides here hoping to buy some $11 or $12 puts tomorrow for an earnings play.
26 Oct Expiration. Yeah, it's a gamble, but I don't think this stock is going up any time soon. The slow bleed today never let up.
26 Oct Expiration. Yeah, it's a gamble, but I don't think this stock is going up any time soon. The slow bleed today never let up.
Posted on 10/12/18 at 11:33 am to bayoubengals88
quote:
The previous forecast for free cash flow (FCF) meant the $0.48-per-share dividend was barely covered on an available-cash-flow basis, and the cut to guidance implies the dividend isn't sustainable from near-term cash generation. The cut in earnings and cash flow guidance was met by a credit ratings downgrade by Standard & Poor's, while Moody and Fitch put the company under review for possible downgrades, which suggests GE will have to rethink its plan.
The cut to FCF guidance calls into question the viability of GE's existing debt-reduction plan and the wisdom of separating healthcare and distributing 80% of it directly to shareholders.
I'll deal with these points in turn. Available cash flow won't cover the dividend GE's deteriorating FCF generation -- principally a consequence of the ailing power segment suffering significant profit declines -- has long been a major gripe for bears watching the stock. GE's original FCF guidance for 2018 called for $6 billion to $7 billion, but Flannery lowered expectations to $6 billion on the second-quarter earnings call, and the latest communique calls for a figure of less than $6 billion.
But here's the thing. GE's existing dividend requires around $4.2 billion in cash, and the company has a large pension deficit to fund -- assume a figure of $2 billion for 2018 -- meaning that available FCF won't cover the dividend. Granted, this year is supposed to mark a trough in GE's earnings and FCF, but given the deterioration in power and the need to use cash for restructuring, it's far from clear what kind of FCF GE will be generating in 2019.
It would surely make more sense simply to cut the dividend and focus on using the cash to improve the business for the long term.
TLDR- GE doesn't have the cash to maintain its dividend
Posted on 10/30/18 at 1:43 pm to TigerintheNO
quote:
General Electric slashes quarterly dividend to just a penny a share, starting in 2019, the second dividend cut in a year.
Third-quarter earnings and revenue missed Wall Street's expectations in the first earnings report under new chairman and CEO Larry Culp. GE will divide the struggling power business into two units.
GE also said on its conference call that the SEC was expanding the scope of its ongoing accounting investigation.
Posted on 10/30/18 at 6:27 pm to TigerintheNO
GE has 292 BILLION dollars in debt, of which 62 billion is current.
Its net income for the last four quarters are the following:
800 million
- 1.147 billion
- 9.6 billion
1.8 billion
It's a garbage company with thin margins that should be worth about one buck.
Its net income for the last four quarters are the following:
800 million
- 1.147 billion
- 9.6 billion
1.8 billion
It's a garbage company with thin margins that should be worth about one buck.
This post was edited on 10/30/18 at 6:28 pm
Posted on 10/30/18 at 9:13 pm to LSUtoOmaha
Oh give me a break.
Sum of the parts valuation is well above current share price.
Sum of the parts valuation is well above current share price.
Posted on 11/7/18 at 1:29 pm to tiger81
Posted on 11/8/18 at 5:57 am to castorinho
I held it for too long. Finally dumped it at 12 something a month or two ago. Good riddance.
Posted on 11/8/18 at 11:22 am to Mr.Perfect
quote:Their credit rating was just downgraded, due to their current debt and leverage, which means they no longer have access to cheaper financing.
Oh give me a break.
Sum of the parts valuation is well above current share price.
And with their debt to equity ratio, and as a result increasing, and as result their debt leverage increasing too. In addition, they’ve had only a marginal increase of 3.4% in revenue over the last year, and decrease YOY for the last quarter. On top of that, they’re had declines across all margins including gross, operating, EBIDTA, pre-tax, and most notably, net margins. And that has all occurred in an fiscal, monetary, and broad economic environment that favorable to both revenue, income, and debt risk.
And because of all of that they’ve already cut their dividend, and many believe they will have to cut it again, maybe even more drastically. And while a dividend should theoretically have minimal impact on its price, the reality is that it’s one of the reasons people will continue to hold it despite its decrease in price, even though it doesn’t come close to offsetting the loss of value of the stock itself.
So what “SUMS” are you using to justify that it’s true valuation is well above the current price? It’s not only failing to remove the underlying problems, they’ve gotten worse, under ideal market conditions, which are likely to become less ideal, and even moreso for GE given it’s lost access to better financing options that is net negative regardless of the market conditions.
I mean a few months back, when it was around $13 dollars per share, you were arguing a short to mid term price target of something like $25 to $30 per share, which would have required it to grow significantly faster than the broader market. And I asked what your justification was for such a high Now its price is a little over $9 per share, a 30% decrease, and you’re still making similar optimistic projections.
So what is your rational for your optimism and how can you continue to remain optimistic when the market doesn’t appear to share the optimism so when if you’re valuation is right, it’s irrelevant only if/when the market reaches the same conclusion and reacts according.
Posted on 11/8/18 at 12:53 pm to buckeye_vol
quote:
And because of all of that they’ve already cut their dividend, and many believe they will have to cut it again, maybe even more drastically
Cut it drastically more than a penny?
Posted on 11/9/18 at 12:29 am to kciDAtaE
quote:
Cut it drastically more than a penny?
I was actually referring to the cut from $0.24 to $0.12 last year, and the story I read last week made it seem like the cut to $0.01 was a possibility; didn’t realize it was official, although that may have been my misinterpretation and not the story’s misrepresentation. Regardless Mr. Perfect has been shilling for it for a while. And while it may be truly undervalued, or at least hit the bottom of a reasonable valuation range, that bottoming argument was pretty common for quite sometime now.
And even if this is the price bottom, it’s not really useful as potential investment since it can just feed at the bottom, and without any price increase, the dividend yield is about 0.44%. With a bunch of banks offering savings account rates of 2.25%, the dividend would take over 5 and a half years to get that return at its current rate.
Posted on 11/9/18 at 1:22 am to buckeye_vol
If they’re still paying only a penny in 5 years they are likely going bankrupt.
Posted on 11/9/18 at 2:54 am to buckeye_vol
the theory from bulls though is that you cut the dividend to feed the growth of the bottom line by reinvesting in the company.
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