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Yamil Berard
Yamil Berard
Articles (192) 

GE Has Bad News? Gurus Don't Care

Over two dozen of the world's top investors held on to GE stock in the final months of the year

March 05, 2018 | About:

All the talk of poor earnings and bad publicity at General Electric (NYSE:GE) is having little effect on the stock picks of some of the world’s savviest value investors.

Many gurus still favor the embattled company’s stock, according to an informal review by GuruFocus. The review examined GE buys, adds and sells in the final months of the year. It showed that more than half of a total of 30 gurus established new positions, held on or simply piled on more shares. Some gurus raised their position in the stock by more than 300% in the final months of the year. Fewer than a dozen gurus reduced their holdings.

Meanwhile, in the fourth quarter, only one guru investor sold out of the struggling company. Ohio-based Diamond Hill Capital (Trades, Portfolio) Management dumped shares after owning a maximum 11,000 over roughly two years. Diamond Hill posted a loss of 20% on GE since it established the position in 2016.

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Warren Buffett (Trades, Portfolio) sold out in the second quarter of last year after holding as many as 5 million shares. The guru still posted a gain of 7% on his investment.

The examination also showed that a number of gurus who began buying shares as early as 2012 posted gains on their investment, in some cases, in the double-digits.

Sitting still

Guru Steven Romick (Trades, Portfolio) stayed put at 7.64 million shares. Others who remained unchanged were investors Tweedy Browne (Trades, Portfolio) (50,000 shares), Bill Nygren (Trades, Portfolio) (20 million shares), Steven Cohen (Trades, Portfolio) (200,000 shares) and Tom Gayner (TradesPortfolio) (95,00 shares).

Scaling Back

In total, 11 gurus decided to reduce their exposure to the company in the fourth quarter of the year.

Ken Fisher (Trades, Portfolio) dropped 1% of his shares. He now holds 21 million shares.

Caxton Associates (Trades, Portfolio) dropped 1.2%, now holding more than 25 million shares.

Mairs and Power (Trades, Portfolio) reduced by 7.2%, staying put on 4 million shares.

NWQ Managers (Trades, Portfolio) reduced by 9%, keeping nearly 1.6 million shares.

Dodge & Cox reduced by 11%, owning 771,000 shares.

Mario Gabelli (Trades, Portfolio) reduced his position by 15%, ending up with 1.25 million shares.

Murray Stahl (Trades, Portfolio) has 67,000 shares, cutting by 17%.

The T. Rowe Price Equity Income Fund is holding on to 6 million shares, after dumping 28%.

Paul Tudor Jones (Trades, Portfolio) owns 208,000 shares after getting rid of 26%.

Michael Price (Trades, Portfolio) has 4,000 shares, reducing by 60%.

And Ray Dalio (Trades, Portfolio) reduced his GE portfolio by 77.5%, owning now 183,700 shares.

Buying new or more

A total of five gurus bought new shares of the company in the fourth quarter.

Pioneer Investments (Trades, Portfolio) bought 8.3 million shares. Mason Hawkins (Trades, Portfolio) established a position with 11 million shares.

Louis Moore Bacon (Trades, Portfolio), Cohen and Tom Russo (Trades, Portfolio) also bought shares for the first time.

George Soros (Trades, Portfolio) increased his holdings by 316% to a total of 42,900 shares. Jim Simons (Trades, Portfolio) increased his by 285% to 24 milion shares.

Joel Greenblatt (Trades, Portfolio) increased by 248% to a total of 463,000 shares.

Richard Snow (Trades, Portfolio) upped his position by 72% to 42,719 shares.

Barrow, Hanley, Mewhinney & Straus holds 64 million shares.

Others who bought more shares were First Eagle Investment (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and First Pacific Advisors (Trades, Portfolio).

Stock at an all-time low

The average price for a share of GE stock was $19.95 in the fourth quarter. The 52-week range is $13.95 to $30.54.

In trading early Monday afternoon, the stock was up 3.51% to $14.62 a share. Year to date, the stock has lost 21% in trading. And, over the last three years, it is down 45%.

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Many of the gurus who stay loyal to GE say they are confident its new management team can turn things around. They believe the company is involved in valuable businesses that will flourish under the new management team. The company's current crisis is the result of years of mismanagement. Many also believe investigations by regulators, such as the Securities and Exchange Commission, will be quickly resolved. So even though the stock is at an all-time low, GE businesses still carry a lot of value. Those businesses include avaiation, oil and gas, health care and renewable energy.

Making money

Some of the 30 gurus who invested in GE over the last several years showed gains in their investments, the GuruFocus examination showed.

Fisher, who still holds GE stock, has made a 6% rate of return since 2012. Robert Olstein (Trades, Portfolio) bought 55,000 shares in the second quarter of 2012, then began gradually reducing shares until he sold out in the third quarter of last year. He made a 20% rate of return.

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Rating: 5.0/5 (1 vote)

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Comments

dhonibabu
Dhonibabu - 5 months ago    Report SPAM

nice post admin

vidmate for blacklberry

dhonibabu
Dhonibabu - 5 months ago    Report SPAM

nice post admin

vidmate for blacklberry

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