Nelson Peltz And GE's Investors Are Still Waiting For A Big Payoff
General Electric Company (NYSE: GE)'s stock is trading a mere 0.31 percent higher Wednesday than it was a year ago, and investors are wondering when, if ever, there will be a big payoff.
As noted by Bloomberg, activist investors Nelson Peltz praised GE back in October of last year when his investment firm Trian Fund Management bought $2.5 billion worth of GE's stock.
Meanwhile, GE's stock exited its worst quarter in more than two years having lost 5.9 percent for the three-month period ending September 30.
Activist investors are notorious for not accepting a break-even investment when the funds could have been used elsewhere. Ordinary investors have also seen their investment in GE remain flat over the past year while the S&P 500 index gained around 5 percent.
Perhaps GE is suffering from an identity issue. Steve Tusa, an analyst at JPMorgan, told Bloomberg that GE is a solid company but investors "expect too much out of it."
The analyst added that there are also earnings risks attached to GE's stock, along with a weak underlying free cash flow.
Meanwhile, companies like Honeywell International Inc. (NYSE: HON) and Dover Corp (NYSE: DOV) spoiled the mood when the industrial companies revised their 2016 outlook lower. Investors won't be blamed to assume that a similar impact is being felt at GE.
At last check, GE was up 0.81 percent on the day at $29.20.
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