It’s been a rough year for General Electric, as the company is down over 25% in the past year. The high-tech industrial firm operates in a wide array of sectors and is well diversified – and yet, they’ve struggled even in the bigger picture. In the past 5 years, GE is down a whopping 60%. Much of this has been due to both worker and equipment shortages – which were made worse during the pandemic. Moreover, GE’s renewable energy business sector has fallen short of expectations due to regulatory uncertainty.
But, as news continues to flow in about the company’s HealthCare spinoff, are the tides starting to turn? Let’s take a look together.
It’s been released that in January of 2023, GE’s new HealthCare spinoff will be complete and will hit the market. And this week, they named 10 executives to their board. Each of these board members brings a wealth of experience with them from various industries – from hospital networks to tech companies, academia, accounting, and more. One member worth noting, in particular, is GE CEO, Larry Culp. He states that this initial group of members is highly qualified and capable – and he feels confident that they will hit the ground running.
Now – it’s important to note that the new Healthcare spinoff will in fact be its own business. However, there’s no doubt that this company will directly impact the financial well-being of the parent company GE. As such, there has been a quick rally for GE stock in the past week. The price has risen almost 5% after the release of the board. So – with all this in mind, what should investors know about GE? Is now a good time to get in ahead of more news about the HealthCare spinoff? Or, is there still too much uncertainty around the company? We can take a look at what VectorVest recommends based purely on fundamental and technical analysis of this stock.
3 Things You Need to Know Before Making a Decision About GE Stock
The VectorVest stock analysis software simplifies investing and helps you make effortless, informed, and most importantly, emotionless decisions. It takes into account all forms of technical and fundamental analysis – boiling down what you need to know into three simple ratings.
These are Relative Value (RV), Relative Safety (RS), and Relative Timing (RT). They’re placed on a scale of 0.00-2.00 – with 1.00 being the average. Together, these metrics make up the overall VST rating a stock is given. This VST rating determines whether the system rates the stock a buy, sell, or hold at any given time. So – let’s take a look at what VectorVest has to say about General Electric:
- Poor Upside Potential: RV is an indicator of long term price appreciation potential. It takes into account projected price appreciation three years out, AAA corporate bond rates, and risk. It helps investors get a better understanding of the true value of a stock. As for GE, the RV rating of 0.54 is poor. To make matters worse, VectorVest calculates the true value of RV to be closer to $27/share. Compared to the current price of $75, GE is way overvalued.
- Fair Safety Rating: RS is an indicator of risk – and helps investors get a sense of a stock’s safety. It takes into account the consistency and predictability of a stock’s financial performance, business longevity, price volatility, and more. And, GE has a fair safety rating of 0.86 – which is slightly below average. However, the comfort index (CI) rating is poor at 0.58 – showing an inability for GE stock to withstand severe or lengthy price declines.
- Good Timing: This is the one positive thing GE stock has going for it right now. RT indicates the trend a stock’s price is exhibiting at any given time. It takes into account the direction, dynamics, and magnitude of a stock’s price trend. As an RT gravitates towards 2.00, it shows a positive price trend – and as it gravitates closer to 0.00, it shows the opposite. As for GE, it has an RT rating of 1.19 – which is good. However, if this RT rating starts to move closer to 1.00, it will suggest the trend is diminishing – so investors should pay attention
All this considered, GE has a fair VST rating of 0.93. This is slightly below average – so, should you hold off on GE for the time being? OR, should you get in now? To discover the clear buy, sell, or hold recommendation, analyze the stock free at VectorVest.com!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for GE, it has poor upside potential with slightly below-average safety. However, it does have a positive price trend.
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