My focus has never been on large caps, and I don’t cover General Electric (GE) often. When I have, I’ve tried to warn here several times (twice in 2017 hereand here) on Seeking Alpha as I have been a fundamental bear for some time. Every time I think the valuation is starting to remotely come into line, another shoe drops that has me questioning the entire corporate structure again. I often get questions about buying the company since I run an Industrials-focused Marketplace offering (Industrial Insights), especially at today’s valuations. In my view, very little has changed of my opinion here in the wake of all the analyst downgrades and the poor outlook for GE Capital driven by the upcoming $6,200M after-tax charge on the way in Q4. I still don’t see a valid reason to pull the trigger. What I spoke to last time I covered the firm heading into the Investor Day rings just as true today:
This isn't meant as a victory lap on a correct call, but just another cautionary tale of why owning a company with eight operating segments, a plethora of intercompany transactions, hazy non-GAAP metrics, and a steep valuation can often be a time bomb sitting in your portfolio.
