The decision by Comcast Corp., the country’s largest cable company, to buy out General Electric in NBCUniversal looks like a smart one, as the media conglomerate posted strong results for the second quarter. …read more
Source: FULL ARTICLE at Phys.org
Filed under: Company News, General Electric, Earnings, Stocks, Investing
By JONATHAN FAHEY
NEW YORK — General Electric posted a slight gain in net income in the second quarter and said its U.S. operations are picking up steam.
General Electric Co. (GE) said Friday that it earned $3.13 billion, up from $3.11 billion a year earlier. On a per-share basis, the company earned 30 cents, up from 29 cents. Revenue fell 4 percent, to $35.12 billion from $36.5 billion.
Adjusted to reflect earnings from continuing operations, GE earned 36 cents a share. That’s 2 cents less than adjusted earnings last year, but one cent better than analysts polled by FactSet had expected. GE shares rose 61 cents, or 2.6 percent, to $24.24 in trading before the market opened.
GE, based in Fairfield, Conn., has a broad view of the global economy because it sells a wide variety of industrial equipment and appliances around the world, including jet engines, medical diagnostic equipment, locomotives, washing machines, natural gas-fired turbines, and oil and gas drilling equipment.
CEO Jeff Immelt said orders in the U.S. showed “strong growth,” an improvement from recent quarters when he expressed caution about the U.S. market. Immelt said emerging markets remained strong and that Europe has stabilized, but remained weak.
The company’s orders for new business rose $7 billion last quarter to a record $223 billion. Immelt said he expects profits to grow in the second half of the year.
GE is in the midst of transforming itself in to a company more focused on industrial businesses. It’s been shedding media and other non-industrial divisions and shrinking its banking division. Infrastructure orders rose 4 percent and profit margins for industrial segments rose 0.5 percent. GE Capital earnings fell 9 percent.
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Source: FULL ARTICLE at DailyFinance
By Narrative Science Despite an expected dip in profit, analysts are generally optimistic about General Electric as it prepares to reports its second quarter earnings on Friday, July 19, 2013. …read more
Source: FULL ARTICLE at Forbes Markets
By Zina Moukheiber, Contributor
Kit Check, a one-year-old digital health start-up, raised $10.4 million in a series A round. Life science venture firm New Leaf Venture Partners led the investment, with participation from Sands Capital Ventures, Easton Capital Investment Group, and LionBird. Kit Check is a graduate of Rock Health, a San Francisco-based accelerator. Co-founder Kevin MacDonald is bringing expertise he acquired at Sun Microsystems and other start-ups to apply in hospital settings an old technology used to track inventory in several industries, including health care. By way of radio waves, Radio Frequency Identification (RFID) identifies objects that are electronically tagged. General Electric, for example, recently announced it is using RFID to make sure hospital personnel wash their hands. Motorola tracks hospital equipment. Kit Check is applying the technology to automate the tedious process of making sure hospitals’ medication kits are up to date—one of the Joint Commission’s most common citations for non-compliance. On average, 20% of kits contain drugs that have expired. By chance, MacDonald came upon that glaringly inefficient process over dinner with a friend, a hospital pharmacist. She complained about the mind-numbing task of manually sifting through medication kits to look for drugs past their expiration date—something a barcode doesn’t provide. Hospitals typically keep between 20 and 50 kits for emergencies such as cardiac arrest, or anesthesia, and each kit contains between 20 and 200 medications for those specific situations. Two pharmacy staffers are assigned the task of verifying kits. “It’s the worst job in the pharmacy,” says MacDonald, who was inspired to form Kit Check. …read more
Source: FULL ARTICLE at Forbes Latest
By Reuters
Filed under: Media, General Electric, Earnings, Aerospace & Defense, Stocks
By Ernest Scheyder
General Electric reported a first-quarter profit in line with Wall Street‘s expectations on Friday, as the conglomerate sold more jet engines and shed its stake in NBC Universal.
The world’s biggest maker of jet engines and electric turbines said it earned $3.53 billion, or 34 cents a share, compared with $3.03 billion, or 29 cents a share, a year earlier.
Excluding one-time items, the company earned 35 cents a share, matching analyst expectations, according to Thomson Reuters I/B/E/S.
Revenue rose slightly to $35 billion, beating the $34.51 billion analysts had expected.
GE‘s order backlog — a closely watched indicator of future sales — rose to $216 billion from $210 billion in the fourth quarter of 2012.
General Electric Co. (GE) shares fell slightly to $22.65 in premarket trading.
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By Alex Dumortier, CFA, The Motley Fool
Filed under: Investing
The S&P 500 and the narrower, price-weighted Dow Jones Industrial Average just recorded their best weekly performances of the year. The S&P 500 is now up 11.4% on the year.
Not surprisingly, then, the VIX , Wall Street‘s fear gauge, plumbed its lowest level since March 15 on Friday, even dipping below 12 on an intraday basis. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.)
The earnings drum is beating
As I’ve argued several times in this column, the rally that began off last year’s June low is being driven by valuation, rather than earnings, with the market willing to pay a higher multiple for a dollar of earnings, as investor risk aversion continues to dissipate. There are good reasons for this — to a certain extent — as fears of global macro dislocations have receded. However, I think it’s worth sounding a few words of caution.
At a price-to-earnings ratio of 14.3, the S&P 500 may not look expensive on the basis of 2013 operating earnings per share; however, that figure masks the range of valuations across the different sectors. In a yield-starved environment, investors have been snapping up shares that pay rich dividends, and that enthusiasm is reflected in the P/E multiples of the consumer staples, telecoms, and utilities sectors, at 17.4, 19.7, and 16.4, respectively.
Furthermore, I continue to believe that the S&P 500’s current forward multiple understates how expensive it really is. Consider that the 14.3 P/E assumes that operating earnings per share will rise nearly 15% year-on-year in 2013. That figure strains credulity; 2012 growth was 0.4%. On this point, first-quarter earnings will provide us with some clues either way, and we have a heavy week ahead of us in terms of earnings announcements, with nearly 15% of the companies in the S&P 500 reporting quarterly results, including more than a third of the Dow components — 11, to be exact:
If you’re ready to invest based on competitive advantage, long-term value creation, and valuation, The Motley Fool’s chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.
The article Next Week’s Earnings: Handicapping the Bull originally appeared on Fool.com.
Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him on LinkedIn.
The Motley Fool recommends American Express, Coca-Cola, Intel, Johnson & Johnson, McDonald’s, and UnitedHealth Group and owns shares of Bank of America, General Electric, Intel, IBM, Johnson
From: http://www.dailyfinance.com/2013/04/14/next-weeks-earnings-handicapping-the-bull/
By Tyler Crowe and Aimee Duffy, The Motley Fool
Filed under: Investing
On the surface, General Electric‘s announcement that it will buy Lufkin Industries just appears to be a manufacturing giant picking up an oilfield services manufacturing specialist. If you dig deeper, though, you find that this could be a big signal of what is to come in North American oil and gas production. Lufkin’s specialty is building artificial lift equipment for oil and gas wells, a service normally reserved for mature wells that need a little extra help bringing resources to the surface.
With so much drilling happening in the U.S. over the past few years, there may be a big boom for this type of particular equipment in the next couple of years. With this purchase, not only is GE locking up a larger market share in this particular industry, but the high price it paid, it shows how valuable this market could be. in this video, Fool.com contributor Tyler Crowe discusses how the deal went down, and he also gives some possible investment ideas that follow this particular trend.
For GE, the recent financial crisis struck a blow, but management took advantage of the market‘s dip to make strategic bets in energy. If you’re a GE investor, you need to understand how these bets could drive this company to become the world’s infrastructure leader. At the same time, you need to be aware of the threats to GE‘s portfolio. To help, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To get started, click here now.
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From: http://www.dailyfinance.com/2013/04/14/what-does-ges-energy-purchase-say-about-the-indust/
By Rich Duprey, The Motley Fool
Filed under: Investing
Flying in the face of lower March retail sales and plunging consumer confidence, Home Depot‘s stock advanced 2.5% yesterday and singlehandedly kept the Dow Jones Industrial Average from falling. In the end, the index closed the day at 14,865, virtually unchanged from the day before.
Yet it wasn’t anything the big box, do-it-yourself shop did on its own that really sparked the rally. Instead it was an analyst upgrade from Jeffries along with an IPO filing by its former wholesale supply business, HD Supply. The latter is probably the larger reason behind the jump in stock, as the proposed $1 billion IPO would place a few coins in Home Depot‘s pocket, since it retained a 12% ownership stake in the business after private equity bought it for $8.5 billion in 2007.
The supply business is a vestige of the horrendous period of empire-building engendered by former CEO Bob Nardelli, a ruinous time where the board of directors, stuffed with his cronies from General Electric, stood by and watched him crush shareholder value. There’s since been a welcome change in leadership, and Home Depot has gone on to become a responsible corporate citizen once more, with shares up 20% in 2013 alone and more than 50% higher than where they stood a year ago.
The HD Supply offering could put even more money in Home Depot‘s bank account since the supply house hasn’t determined the number of shares it will actually offer, meaning the IPO could ultimately be much larger than $1 billion, increasing its value to the Big Orange Box.
Lethargic networks
As Home Depot rose in value over the past year, Active Network , an online event-management service, has been going in the opposite direction, suffering a yearlong decline that’s resulted in the loss of 70% of the company’s value. Yesterday, though, it went in the other direction, jumping more than 10% after announcing that it will soon be reporting its earnings.
Hardly seems a reason for such a response, considering expectations are that growth will slow this year even if losses will narrow. Yet it also announced an expansion of its partnership with Ironman, an international participation-sports challenge organization that grew from a single race to some 190 events. Active will provide Ironman with a seamless global platform for activity participation and registration.
Perhaps the combination of the two announcements gives investors hope that it will finally be able to reverse its yearlong slide.
Dance card filling up
Can a deal finally be at hand that allows InterOil to deliver on the expectations it’s promised investors for so long? We’ve been waiting more than a month for the Papua New Guinea oil-exploration specialist to decide whom it will partner with. The government of the tiny oil outpost demanded that it be a “supermajor” oil company (at the same time it was extracting better terms for itself) as a way of guaranteeing that the oil will
From: http://www.dailyfinance.com/2013/04/13/hopes-high-with-home-depot-stock-these-2-other-com/
By Blake Bos and Isaac Pino, CPA, The Motley Fool
Filed under: Investing
In this video, Isaac Pino highlights a strong business segment of General Electric — namely, its aviation division. Many foreign countries, including emerging markets, have been growing their airlines, and GE jet engines are a popular choice. Aviation makes up 13% of GE‘s revenues and has a strong backlog, which not only bodes well for GE aviation but also may signal general economic growth in these foreign countries. Isaac says GE‘s aviation products may be a stepping stone for the company’s other divisions to take advantage of these other growth opportunities.
For GE, the recent financial crisis struck a blow, but management took advantage of the market‘s dip to make strategic bets in energy. If you’re a GE investor, you need to understand how these bets could drive this company to become the world’s infrastructure leader. At the same time, you need to be aware of the threats to GE‘s portfolio. To help, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To get started, click here now.
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From: http://www.dailyfinance.com/2013/04/13/1-business-thats-soaring-at-ge/
By Aimee Duffy and Tyler Crowe, The Motley Fool
Filed under: Investing
In today’s great energy debate, it often seems like you have to be on one side or the other. You are either for oil and gas or for renewables. Realistically, however, it is likely that a combination of fossil fuels and alternative energy will be our path forward. In this video, Fool.com contributor Aimee Duffy talks to fellow contributor Tyler Crowe about four companies that give investors exposure to a multitude of energy options, covering everything from oil and gas to wind and solar.
For GE, the recent financial crisis struck a blow, but management took advantage of the market‘s dip to make strategic bets in energy. If you’re a GE investor, you need to understand how these bets could drive this company to become the world’s infrastructure leader. At the same time, you need to be aware of the threats to GE‘s portfolio. To help, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To get started, click here now.
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From: http://www.dailyfinance.com/2013/04/12/investing-in-all-of-the-above/
By Justin Loiseau, The Motley Fool
Filed under: Investing
Chief executives are born leaders. But when private sector heads become soapbox pundits, it can drastically affect their business. Overstepped boundaries can cause public outcry, consumer backlash, or — at times, overwhelming support. Let’s look at an emerging hot topic and two historic examples to see what separates corporate gaffes from corporate gold.
“Mountains of debt”
In case you haven’t heard, the U.S. government has a lot of debt. Tax hikes and spending cuts have sparked economic and political controversies nationwide, and hundreds of executives are offering their own opinion.
On Monday, Duke Energy CEO Jim Rogers issued a statement outlining his argument for Congress to cut debt. In a 500-word letter released via Duke’s Investor News website, the CEO urged citizens to push Washington’s prioritization of the national debt. Although Rogers touched on some specifics, the larger voice behind his letter came from the announcement that he’s one of the latest CEOs to join the Campaign to Fix the Debt.
The 350,000-strong “non-partisan movement to put America on a better fiscal and economic path” includes over 170 executives organized as a “CEO Fiscal Leadership Council.” The list (link opens PDF file) contains dozens of corporate superstars, including Microsoft‘s Steve Ballmer, General Electric‘s Jeffrey Immelt, and JPMorgan‘s Jamie Dimon.
What’s your job description?
Whether or not our national debt needs fixing isn’t relevant to the question at hand: Should business leaders partake in political debate? The links connecting government to corporations are undeniable, and each entity directly and indirectly affects the other.
My answer to this question: It depends. Let’s take a look at two prominent CEOs’ political polemics to see what separates gaffe from gold.
Papa’s got a brand new bag
Papa John’s founder and CEO John Schnatter is no fan of Obamacare. After the Affordable Care Act was first proposed, Schnatter told shareholders he expected the new legislation to cost his company around $5 million to $8 million a year, costing the company $0.11 to $0.14 more per pizza.. To cover costs, Papa John‘s proffered two options: (a) raise pizza prices and (b) cut employee hours to disqualify them from company coverage.
Supporters and naysayers flooded the Internet, airwaves, and Investor Relations office with their own two cents. Speaking to Naples News, Schnatter reflected that he “got in a bunch of trouble” for his double-edged dialogue.
Although I commend him for drawing a direct link to his business that consumers can understand, this connection is also his argument’s greatest flaw. $0.11 to $0.14 per pizza? That’s quite a calculation, and seems to micromanage Obamacare’s effects.
Buffett’s bluff
While Schnatter’s comments focused on the issue of government spending, Berkshire Hathaway‘s Warren Buffett recently offered his take on taxation. In a Nov. 25, 2012 New York Times editorial, Buffett outlined his bullish case for a minimum tax for the wealthy.
Just like Papa John‘s, the Oracle of Omaha’s words were simultaneously lauded and laughed
From: http://www.dailyfinance.com/2013/04/11/should-ceos-talk-politics/
By Taylor Muckerman and Joel South, The Motley Fool
Filed under: Investing
Early Monday morning, General Electric announced that it would be acquiring Lufkin Industries for around $3.3 billion. This acquisition continues the trend that we have seen start with GE in 2007; since that time, it has spent $11 billion to purchase companies in the energy space.
Nothing artificial about what Lufkin brings to GE
What GE is getting with Lufkin Industries is a company that is heavily involved in artificial lift. This service has proven vital to the oil and natural gas industry due to its ability to increase well efficiency once pressure inside the well has dropped. Estimates are that 95% of wells worldwide utilize some form of artificial lift, so this segment could provide a nice boost to GE‘s business as global drilling continues to pick up.
Artificial lift is a critical service and is just one part of Halliburton’s portfolio
Domestic oil and gas service companies have taken a hit in the recent past due to a slowdown in the natural gas drilling boom of the last couple of years. As this market looks to rebound, investors would be wise to consider Halliburton, one of the top companies in the business and one of those most in tune with the domestic market. To access The Motley Fool’s new premium research report on this industry stalwart, simply click here now and learn everything you need to know about how Halliburton is positioning itself both at home and abroad.
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Source: FULL ARTICLE at DailyFinance
By Matt Thalman, The Motley Fool
Filed under: Investing
Now that earnings season is finally here, investors can focus on more of the important factors: earnings, revenue, margins — all the fun stuff. Alcoa kicked things off last night, and although the company beat earnings estimates, a revenue decline has some investors concerned.
But the company’s slight misfortune has not held back the markets today. As of 12:50 p.m. EDT, the Dow Jones Industrial Average is up 51 points, or 0.35%. The S&P 500 and the NASDAQ have both risen 0.28%. While the markets are climbing, a few of the Dow’s big components are being left behind.
McDonald’s has lost 0.5% today. Recently, several hundred fast-food workers in New York City gathered to protest their pay, which averages $8.25 per hour in the state of New York. The protest has some wondering whether a statewide, or even companywide, strike would make a difference. But many doubt that a walkout would change the status quo, pointing to Wal-Mart workers’ long and varied disputes with their employer.
Shares of General Electric are down 0.5% today. One reason for the decline is the company’s announcement yesterday that it will purchase Lufkin Industries for $3.1 billion. The purchase price is a 38% premium over Lufkin’s closing price of last Friday. Some shareholders and analysts believe GE overpaid for the oilfield equipment manufacturer.
Shares of IBM are flat, having recovered from earlier losses, as Hewlett-Packard releases its newest servers, the Moonshot line. The Moonshot is expected to outperform traditional server systems in nearly every way imaginable. As demand for cloud computing grows, customers will want servers designed to handle large workloads at high speeds — servers like the Moonshot. If HP’s server is as good as advertised, IBM may experience some short-term effects, but it will likely bounce back if it can produce a competitive device in the future.
More on McDonald’s
McDonald’s turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the golden arches reclaim their throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald’s future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.
var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, …read more
Source: FULL ARTICLE at DailyFinance
By Dan Caplinger, The Motley Fool
Filed under: Investing
If you only expect to see traditional industrial companies in the Dow Jones Industrial Average , then you’re way behind the times. The Dow now includes companies from nearly every sector of the market.
Energy stocks don’t make up a huge portion of the Dow, with only two traditional integrated oil and gas companies in the average. But given their size, those stocks have a big impact on the Dow. Let’s take a look at how these companies have fared so far in 2013 and what their prospects are for the rest of the year and beyond.
Dow Energy Stocks Total Return Price data by YCharts.
It’s no mistake that I’ve included General Electric on this list. Despite the extensive reach that the conglomerate has across many industries, GE has focused heavily on energy as part of its core strategy for boosting its growth. Just yesterday, GE reaffirmed its commitment to energy by making a buyout bid for Lufkin Industries , boosting its presence in the oil services sector and building more capacity as it grows into an energy infrastructure giant. GE‘s exposure to the booming energy sector is a big part of how it has been able to recover so strongly from its financial-crisis depths.
For Chevron and ExxonMobil , on the other hand, production and pricing have been ongoing obstacles to growth. Given their size, it’s incredibly difficult for these oil supermajors to find enough new energy-producing assets to make up for the natural rate of decline in any given well’s production levels. Yet although Exxon is projecting just 2% to 3% annual growth in production over the next four years, Chevron hopes for better results, with its plan to raise its production by a million barrels per day representing growth of between 9% and 10% annually.
Meanwhile, the energy boom has once more heightened environmental concerns over oil and gas production and transportation. Exxon’s recent Arkansas spill from a crude-oil pipeline break and Chevron’s ongoing multibillion-dollar environmental lawsuit in Ecuador highlight the importance of responsible development in avoiding costly damages and a bad reputation.
To start performing to their full potential, energy stocks need the support of stronger overall economic growth. Once the global economy starts firing on all cylinders, demand for oil and gas should start supporting prices and creating more profit for Exxon and Chevron. Meanwhile, so long as companies are looking for energy, GE stands poised to help them find it — and take its fair share of the profits in the bargain.
The financial crisis dealt GE a blow, but management took advantage of the market‘s dip to make strategic bets in energy. To help you understand the full implications of that decision, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To …read more
Source: FULL ARTICLE at DailyFinance
By Jeremy Bowman, The Motley Fool
Filed under: Investing
After spending most of the day in negative territory, the Dow Jones Industrial Average made a late run to finish up 48 points or 0.3% as optimism about the beginning of earnings season seemed to take over late in the day. Following multiple reports last week about a slowing job market, Wall Street seemed happy to shift its focus elsewhere as earnings reports begin to roll in.
Alcoa kicked off the quarterly reports in style, gaining 1.8% during the trading session, and reporting overall profit growth of 59% to $149 million or $0.13 a share, even as revenue continued to slide, falling 3%, on weak aluminum demand. Still, the manufacturer managed to lift earnings per share with growth in its downstream segment, which sells products such as aluminum wheels and aircraft parts. EPS topped expectations of $0.13 a share, but sales came in a bit short. Shares were down 1.3% in after-hours trading.
Elsewhere on the Dow, Coca-Cola jumped 2% as separate reports reaffirmed the growth potential in the energy-drink industry. Wells Fargo said that energy drinks should push overall growth in the beverage industry while UBS put in its own vote of confidence in the industry, saying that Monster Beverage had strong upside potential in international sales. After hours, Monster, once thought of as a buyout target for Coca-Cola, also announced a $200 million share-buyback program. Shares of the energy-drink maker were up 4.7% today.
Johnson & Johnson led the Dow laggards today, finishing down 1.1% after getting downgraded by JPMorgan Chase. Michael Weinstein dropped his rating from “overweight” to “hold,” saying that the health-care giant’s stock trades at an 8% premium to its intrinsic value and that he expects the company lower its guidance soon.
Shares of General Electric finished up 0.8%, but it sent Lufkin Industries, a maker of oil pumps and similar transmission products, up 37.6%, after agreeing to acquire it. GE will pay about $3 billion for Lufkin, a move that gives the conglomerate increased exposure to the fast-growing shale oil-and-gas industry, and will make GE Oil & Gas the company’s third largest unit. The deal is expected to close in June.
Finally, outside the Dow, CEO Ron Johnson was finally ousted from J.C. Penney following one of the more tumultuous years in retail history. Johnson’s brand revamp never took and cost more the company more than a quarter of its sales, and the retailer has already taken several steps to undo his decisions, such as bringing back markdowns. Former CEO Mike Ullman, who led the company for nearly seven years before being replaced by Johnson, will be back at the helm. Investors seemed uninspired by the decision, as shares were off 9.9% after hours.
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in …read more
Source: FULL ARTICLE at DailyFinance
By Dan Caplinger, The Motley Fool
Filed under: Investing
First-quarter earnings reports are finally here, but before the first release of the official earnings season came this afternoon, the Dow Jones Industrials managed to start things off on an optimistic note, rising 48 points even as many analysts fear that any slowdown in earnings could trigger a reversal in the stock market‘s impressive gains over the past four years. Broader market measures rose more substantially, with gains of more than half a percent for the S&P 500 and Nasdaq Composite.
The biggest percentage gainer in the Dow was Bank of America , which climbed 2%. Despite having acquired a terrible image from its needing bailout support and its attempts to raise income in the aftermath of the financial crisis, B of A has been reworking its image, and Fool contributor Amanda Alix points to “super-branches” with luxury accoutrements as well as more advanced ATM technology as evidence that the bank has learned from its past missteps.
Elsewhere in the financial sector, AIG climbed nearly 4% to a 52-week high as the company seeks to block a potential shareholder derivative lawsuit that former chairman and CEO Hank Greenberg wants to file against the U.S. government. Greenberg seeks to argue that the terms of the government‘s bailout of the insurance company were unfair to AIG, but AIG correctly anticipates a huge potential outcry from outraged taxpayers if such a suit were to go forward. Meanwhile, AIG also completed the sale of its American Fuji Fire and Marine subsidiary to White Mountains Insurance, with the deal that was announced last year having had to wait for regulatory approval before proceeding. AIG has done a good job of recovering from the financial crisis by concentrating on its core business, and investors who got in after the financial meltdown have reaped the benefits.
Finally, Weatherford International rose nearly 4% on the heels of General Electric‘s deal to buy Lufkin Industries announced this morning. As a fellow oil-services provider, Weatherford is rising on speculation that merger and acquisition activity in the space could rise as a result of the GE acquisition. Yet GE almost certainly wouldn’t be interested after having bought Lufkin, and with Weatherford’s market cap of nearly $10 billion, it would take a similarly big buyer to pull off a buyout of that size. It’s hard to see Weatherford as an acquisition candidate even after the Lufkin buyout.
Today’s gains add to the huge returns that investors have earned as Bank of America’s stock doubled in 2012. Are there more gains yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool’s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click …read more
Source: FULL ARTICLE at DailyFinance
By Chris Hill, The Motley Fool
Filed under: Investing
The following video is from Monday’s MarketFoolery podcast, in which host Chris Hill, along with analysts Jason Moser and Matt Argersinger, discuss the top business and investing stories of the day.
General Electric announced on Monday that it’s buying oilfield services firm Lufkin Industries for $3.3 billion. Shares of Lufkin were up sharply on the news, but shares of GE were down. Did GE overpay? What does the deal mean for investors going forward? In this installment of MarketFoolery, our analysts talk about what the deal means for investors and discuss some other oil stocks on their radar.
For GE, the recent financial crisis struck a blow, but management took advantage of the market‘s dip to make strategic bets in energy. If you’re a GE investor, you need to understand how these bets could drive this company to become the world’s infrastructure leader. At the same time, you need to be aware of the threats to GE‘s portfolio. To help, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To get started, click here now.
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Source: FULL ARTICLE at DailyFinance
By Justin Loiseau, The Motley Fool
Filed under: Investing
Duke Energy CEO Jim Rogers is calling on people to encourage federal lawmakers to “take immediate action to develop a more sustainable financial strategy for the country.”
Rogers released a statement today announcing he has joined the nonpartisan group Campaign to Fix the Debt.
“At more than $11.8 trillion, the size of our publicly held national debt currently amounts to more than 73% of our entire economy, and is set to hit 100% by the early 2030s,” Rogers said in his statement. “A debt burden of this magnitude could increase interest rates, inflation and unemployment, and could even lead to a debt-fueled fiscal crisis.”
The Campaign to Fix the Debt is a “non-partisan movement to put America on a better fiscal and economic path.” Among the group’s 350,000 members are more than 170 members of the CEO Fiscal Leadership Council. Notable names include Microsoft‘s Steve Ballmer, General Electric‘s Jeffrey Immelt, and Goldman Sachs‘ Lloyd Blankfein.
In his statement, Rogers urges Washington to consider sustainability, efficiency, reliability, “smart” spending cuts , and “comprehensive” tax reform .
The article Duke Energy CEO Joins Push Urging Congress to Cut Debt originally appeared on Fool.com.
Fool contributor Justin Loiseau owns shares of General Electric Company. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.
The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of General Electric Company and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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Source: FULL ARTICLE at DailyFinance
By Brian Pacampara, The Motley Fool
Filed under: Investing
Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
What: Shares of Lufkin Industries soared 38% today after industrial behemoth General Electric agreed to acquire the oil-field pump maker for $3.1 billion.
So what: The all-cash deal values Lufkin at $88.50 per share and represents a premium of about 38% to its closing price on Friday. GE is making the move to capitalize on the booming business of extracting oil and natural gas from shale rock, giving the shares of Lufkin peers like Weatherford International and Dover a small bump today as well.
Now what: The transaction, which was unanimously recommended by Lufkin’s board of directors, is expected to close in the second half of 2013. “Lufkin’s world-class people, equipment and services fit perfectly in our portfolio and will enable us to offer a wide range of artificial lift solutions to our customers in this fast-growing artificial lift sector,” GE Oil & Gas CEO Daniel Heintzelman said. So while Lufkin is likely all popped out at this point, GE‘s rapidly increasing presence in the oil-field services business might be worth buying into.
For GE, the recent financial crisis struck a blow, but management took advantage of the market‘s dip to make strategic bets in energy. If you’re a GE investor, you need to understand how these bets could drive this company to become the world’s infrastructure leader. At the same time, you need to be aware of the threats to GE‘s portfolio. To help, we’re offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE‘s multiple businesses. You’ll find reasons to buy or sell GE today. To get started, click here now.
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Source: FULL ARTICLE at DailyFinance
By Dan Caplinger, The Motley Fool
Filed under: Investing
Recently, investors have started worrying a lot more that the stock market‘s rally has come too far too fast. With last week’s poor employment report underlining the fact that growth in jobs hasn’t kept pace with some other economic indicators, many investors have positioned themselves more defensively in anticipation of a potential downturn in stocks. Moreover, as earnings season begins, companies will reveal what really happened during the first quarter. This morning the stock market reflected that general uncertainty, and by 10:55 a.m. EDT the Dow Jones Industrials were down 0.26%, with the broader markets down less sharply.
In their anxiety, investors have gravitated to more defensive stocks in an effort to protect themselves from losses. But this morning, health care stalwart Johnson & Johnson is the biggest decliner in the Dow, falling 1.5% as the company got downgraded by an analyst at JPMorgan. The main problem the analyst cited was valuation, as J&J’s stock has rocketed higher even as the company faces potential liability linked to recent product recalls. The drop emphasizes how important it is to look at valuation, as even defensive stocks can fall if their prices get too far out of line with their prospects.
UnitedHealth has also given up ground, down 0.8%. With little news on the company, the move appears just to be a small giveback of some of the massive gains that UnitedHealth and fellow health insurers enjoyed last week when looming Medicare reimbursement rate cuts suddenly turned into modest increases. It increasingly appears that Obamacare may prove more of a positive than a negative for UnitedHealth and its peers, even though the company will have to cover conditions it would previously have excluded.
Finally, Lufkin Industries soared 38% on news that General Electric will buy the oil field equipment company for $88.50 per share, or $3.1 billion. The move is obviously great news for Lufkin shareholders, but it also shows the extent to which GE is trying to move forward in building up its energy exposure. Given the huge ramp-up in domestic energy-production, GE‘s bid to become a vital piece of the energy infrastructure and equipment business is clearly a growth opportunity.
Is Johnson & Johnson still a safe investment?
Johnson & Johnson’s critics are convinced that the company is spread way too thin. Find out more about whether J&J is too big for its own good or a well-diversified giant that’s perfect for your portfolio in the Fool’s new premium report outlining the Johnson & Johnson story in terms any investor can understand. Claim your copy by clicking here now.
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Source: FULL ARTICLE at DailyFinance
