Super Bowl 'Smash-It-Up' Trades
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Super Bowl Trade III: Buy General Electric (GE)
Is it Immelt, or is it Memorex?
By Bryan Perry
The slogan goes "GE, We Bring Good Things To Life." If only GE could bring to life its common shares, now trading at $12 and sporting a 10.3% dividend yield. Holy Mackerel! CEO Jeff Immelt pulled out his sword recently to declare war on the short sellers of his company's stock. After all, GE is a triple-A rated company … right?
A double-digit yield on GE? Here is the quote of the year, and it's only late January. "The first-quarter dividend is done, and we are committed to our plan for $1.24 per share for the year. We believe the GE dividend provides our investors with a solid return in this uncertain time," Immelt said.
OK, so here's the deal. The company ended 2008 with $172 billion of infrastructure equipment and services backlog and $48 billion in cash. I say they make the turn. They operate in industries where big spending will occur. That said, buy the stock for 3-point move to $15 (25%) over the near term on any rally and lock in a 100-watt dividend yield.
Buy General Electric.(GE)
