As General Electric (GE) has trended downward the last couple of years there has been a shortage of market players that thought it was a good value. It was a hard investment to time as the amount of bad news seemed endless and even the analysts were skeptical about a turn.
Finally in December the stock formed a double bottom and started to turn back up. It has gapped up several times on good news and gapped up again this morning on news that it is selling its biopharma unit to Danaher (DHR) in order to pay down debt and improve its balance sheet.
The stock has seen some profit taking as it failed to hold its 200-day simple moving average but the big issue now is whether GE is still a decent value play after moving nearly 60% off the recent lows. Just because the stock is down substantially from its all-time highs doesn't mean that it is still 'cheap'.
GE now sells with a trailing PE of 15 and is expecting EPS growth of 11% for 2019 and 28% in 2020. That isn't a bad valuation but the stocks starts running into substantial overhead around $12. Further upside may not come as easily but if you are in for the long haul it isn't a terrible value.
The overall market continues to hold on to early gains, and breadth is quite healthy again with around 4700 gainers to 2450 decliners. The number of new 12-month highs is around 300 which isn't bad but still reflects a market well below its 12-month highs.
One name I'm watching here is Intelsat (I) which was a recent stock of the week. It is moving over key resistance at the $25 level and is in position to gain momentum as speculation over 5G spectrum accelerates. President Trump recently expressed interest in the 5G technology and I believe this will be a theme of increased interest as the year progresses.
GE may still be a decent value but I'd prefer to park my money in Intelsat.