General Electric's (GE) stock has been on a rollercoaster ride this past year gyrating from highs of around $12 a share before being pummeled to all-time lows amidst the Coronavirus Pandemic. GE shares have exhibited a strong resurgence in recent months amidst growing investor optimism, a strong comeback under new leadership, and material improvements across GE's businesses. This article articulates my bullish investment thesis on GE, discussing business advantages, fundamental analysis, valuation, and current headwinds.
Having covered GE in the past, I have always kept an open mind regarding the company's prospects. Under the previous CEO John Flannery, although material strides had been made to divest unprofitable operations, increase cash flow, and improve the positioning of the business, GE continued to be burdened by stagnating turnaround efforts, unrealistic guidance, and executive indecision. When news was released that Flannery would be stepping down and Larry Culp would be assuming the role of CEO it promised a new vision, management style, and results for the company. I can say this unequivocally that Larry Culp's ascension as CEO of General Electric has been one of the best decisions GE has made in decades. Credit to Flannery, progress was made but Larry Culp is going to bring GE over the goal line. Overall GE's business has drastically improved and prospects remain encouraging.
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