Market Overview

General Electric CEO Buys $3M In Stock

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General Electric CEO Buys $3M In Stock

General Electric Company (NYSE: GE) investors have confidence that CEO Larry Culp’s turnaround plan will help the company return to a path of long-term growth over the next several years.

On Monday, Culp demonstrated once again that he's confident about the future of the company and its investors by buying roughly $3 million of GE stock.

New filings disclosed Culp’s purchase of 331,684 GE shares at a price of $9.04 each. Other GE directors bought an additional $500,000 in GE stock.

Why It’s Important

It’s not the first time Culp has put his own money into GE. Culp previously purchased $2.2 million of GE stock on Nov. 5, 2018 at the price of $9.73.

Investors are hoping Culp timed this week’s purchase better than his last one. In the month following Culp’s previous large purchase in November, GE shares dropped 21.5% before rebounding in the first half of 2019.

There are signs Culp’s turnaround strategy of streamlining GE and improving its balance sheet may be starting to gain traction. Last month, GE exceeded earnings expectations for the second straight quarter and raised its full-year guidance for industrial free cash flow by $1 billion.

Yet GE bears still question the upside for the stock given the limited opportunity for long-term cash flow and earnings growth following aggressive asset sales by the company. 

What’s Next

GE is also facing multiple headwinds in the near-term.

The grounding of the Boeing Co (NYSE: BA) 737 MAX has cost GE business. In addition, Culp said earlier this year the U.S. trade war with China will cost the company between $400 million and $500 million in 2019.

GE shares were trading higher by 4.81% at $9.48 at the time of publication Tuesday. 

Related Links:

Analysts Speak Up On GE's Solid Quarter

How GE Investors Could Benefit From The Boeing Groundings

Photo by Jud McCranie via Wikimedia

Posted-In: Larry CulpNews Management Insider Trades Top Stories Best of Benzinga

 

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