February U.S. retail sales ex autos rose 0.7%. Right. January was also revised up. Maybe they only surveyed Walmart.
****
Mea Culpa
I forgot that I wrote the following Tuesday morning at 5:54, just ahead of a 6% rally. Even I don't read me.
"The futures are up nicely (yawn) and oil is flattish. There continues to be smart money around calling for a rally. I'll know it when I see it."
****
If you've been waiting for a chance to sell Ebay, you might as well do it today. The stock is trading up a couple of percent coming out of yesterday's analyst meeting where the company gave super rosy projections for 2011. Alrighty then.
****
GE's debt is no longer AAA. It may be that the U.S. government's debt is no longer AAA.
Showing posts with label ge. Show all posts
Showing posts with label ge. Show all posts
Thursday, March 12, 2009
Friday, January 23, 2009
GE's Dividend
High dividends on common stocks are often a sign that business is bad and the dividend is about to be cut. GE reports this morning and the dividend on its common is over 9%. If the stock reports a weak quarter, it will be double digits.
A lot of commentators are wondering whether GE results will be strong enough to protect the dividend. I'm beginning to question the wisdom of that.
GE's return on equity over the last two years has been around 19%. To oversimplify, if you, Mr. Investor, give GE a dollar of equity, they will earn almost 20% on that dollar year in and year out. If you want the dividend protected, you would rather get 9% back on your money than have GE reinvest it in the business at a higher return.
I understand that it doesn't exactly work that way. There are dividend-driven investors and stability of dividends is viewed by may as a "quality" measure.
I'm just not so sure that GE paying out double digits makes sense. I wonder what would happen if Immelt says on the call, "There are so many fantastic investment opportunities across all of our core markets that we are cutting the dividend to ensure utter global industrial/financial domination."
A lot of commentators are wondering whether GE results will be strong enough to protect the dividend. I'm beginning to question the wisdom of that.
GE's return on equity over the last two years has been around 19%. To oversimplify, if you, Mr. Investor, give GE a dollar of equity, they will earn almost 20% on that dollar year in and year out. If you want the dividend protected, you would rather get 9% back on your money than have GE reinvest it in the business at a higher return.
I understand that it doesn't exactly work that way. There are dividend-driven investors and stability of dividends is viewed by may as a "quality" measure.
I'm just not so sure that GE paying out double digits makes sense. I wonder what would happen if Immelt says on the call, "There are so many fantastic investment opportunities across all of our core markets that we are cutting the dividend to ensure utter global industrial/financial domination."
Friday, July 11, 2008
Progress Away From Mortgages?
The 3G iPhone is launching this morning and there seem to be a lot of genuinely excited people waiting to get one. Upwards earnings revisions driven by new product cycles are the best kind.
GE's quarter wasn't a disaster and the infrastructure business was strong. Absent a global recession, they look fine.
Citigroup is dumping its German retail operations in exchange for some much-needed capital.
BUD may agree to be taken over after all - after all of this hand wringing.
The futures are getting hammered, though. Oil is up again and nobody knows what to do about FNE/FNM.
long BUD
GE's quarter wasn't a disaster and the infrastructure business was strong. Absent a global recession, they look fine.
Citigroup is dumping its German retail operations in exchange for some much-needed capital.
BUD may agree to be taken over after all - after all of this hand wringing.
The futures are getting hammered, though. Oil is up again and nobody knows what to do about FNE/FNM.
long BUD
Fannie and Freddie
I'm not a mortgage expert but I'm going to give myself a pass today, because most mortgage experts are either busto, looking for other careers or very busy (the good ones) after what has happened over the last 12 months.
The NY Times and others this morning are talking about whether our valiant government led by the Fed will push Fannie Mae and Freddie Mac into conservatorship and take over their loan portfolios. There is a debate over whether they should and what will happen to the common stock holders.
My view is that they might as well do it, and soon. The bad loans on the GSEs' books are implicitly guaranteed by the U.S. Government anyway. Orderly demise of any large institution is preferable to sudden implosion or death by water torture. And finally, putting these two to rest will help the mortgage market find a bottom - arguably leading to fewer future defaults in the system and a more healthy mortgage market sooner.
GE reports in 20 minutes. Not much is expected. In an unusual move, they announced before they reported this morning that they are selling their Japan consumer finance arm to Shinsei for $5.4 billion.
The NY Times and others this morning are talking about whether our valiant government led by the Fed will push Fannie Mae and Freddie Mac into conservatorship and take over their loan portfolios. There is a debate over whether they should and what will happen to the common stock holders.
My view is that they might as well do it, and soon. The bad loans on the GSEs' books are implicitly guaranteed by the U.S. Government anyway. Orderly demise of any large institution is preferable to sudden implosion or death by water torture. And finally, putting these two to rest will help the mortgage market find a bottom - arguably leading to fewer future defaults in the system and a more healthy mortgage market sooner.
GE reports in 20 minutes. Not much is expected. In an unusual move, they announced before they reported this morning that they are selling their Japan consumer finance arm to Shinsei for $5.4 billion.
Subscribe to:
Posts (Atom)