Friday, March 6, 2009

When you can snatch the pebble from my hand...

2005 - $1.64
2006 - $1.86
2007 - $2.20
2008 - $1.78

Can someone figure out what the new normal is at GE? That's a 2 year chart at the left. It's a pretty effortless move from $42 to $6. Earning per share history is above. There must be a problem with those numbers, because as fickle as this market is, it wouldn't let a Buffett-endorsed, baseball and apple pie market leader in many markets trade at 3x normalized earnings.

GE Capital is clearly wrapped around the axle of a lot of debt which may or may not be more of a problem, but the company reiterated this week that GE Cap will be profitable in the March quarter. I was mildly positive when they cut the dividend but the stock has been keelhauled since then. I fail on this name.

I kind of want to own it. A smart friend of mine is still short it. I'll buy you a donut if you can tell me whether they'll earn more than a buck in 2012.

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