Not so quick to value investors.
Despite the not so good price action in the general market on Friday, General Electric Co (GE) shares rose 3.35% to $ 13.62 at noon.  GE shares are solidly above their current 52-week low of $ 12.73, which was reached on March 26. Now, with almost $ 1 per share from those minimums, many investors are clamoring for a fund in General Electric. Maybe it is, but given its history, there is no way to be sure yet.
In short, investors need more evidence. Because we've seen this price action probably half a dozen or so since last summer. The story goes like this:
Stocks fall before GE shares finally consolidate near their new low. Then it appears higher in what appears to be a background set. And here, the actions finally find a way to go back and reach new lows.
Seriously, just look at the table:
Buying these fake funds may seem innocent, perhaps, as a way to "reduce the cost base." but even buying about $ 20, which looked like a limited risk scenario after its seemingly large decline of $ 28, has produced huge losses for investors. The downward trend has been so pronounced that 50-day, 100-day, and 200-day moving averages tend to be markedly lower.
This looks like the graph of an Internet growth action upside down!
Anyway, the first step for the bulls will have to be a break above the 50 day moving average. More than 100 days and GE shares could be in business. If the losses do not become so severe, buying near these minimums would not seem like a bad idea.
JPMorgan analyst Stephen Tusa, who has been reducing this movement, recently reiterated its "generous" price of $ 11. target, which implies a 20% disadvantage of current levels. Cowen analysts reduced their target price from $ 15 to $ 12 this week, adding that they do not believe the dividend (despite having been halved in November) is safe unless there is a change in the current business. GE.
It would be one thing if GE were cheap, but in many metrics, it is not. At this time, many investors would prefer to pay for United Technologies Corporation (UTX), Honeywell International Inc. (HON) or 3M Co (MMM), the last two belonging to the Charitable Trust Folder of Jim Cramer & # 39; s Action Alerts PLUS .  The end result of GE's actions: it is better to lose the GE minimum and buy when the coast is clear than to risk buying the fund now and see deeper losses.
It is also worth noting that General Electric will report the profits on April 20 and organize an investor meeting on April 25.
Before You Go
Prepare for the mandatory investment conference of 2018, hosted by none other than Jim Cramer of TheStreet. From an exclusive interview with PayPal's CEO, Dan Schulman, to expert panels that address investment in the stock market and alternative investment, you will not want to miss the event that TheStreet organizes on May 5. The details are below.
How to diversify your portfolio: a Boot Camp for investors
- Date: Saturday, May 5, 2018
- Location: 117 West 46 th Street, New York City