Business Corpus: General Electric: Longtime Bear No Longer Says Sell GE StockA longtime General Electric bear, who correctly predicted a dividend cut and the industrial giant's booting from the Dow Jones index, no longer says sell GE stock. The post General Electric: Longtime Bear No Longer Says Sell GE Stock appeared first on Investor's Business Daily.

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General Electric (GE) is no longer a sell, in the view of a longtime GE bear, who resumed coverage of GE stock with a hold rating.

"Management is taking bold actions to unlock value, and we do acknowledge arbitrage opportunity," analyst John Inch of Deutsche Bank wrote in a note released late Wednesday.

He added: "On a near term basis, some risk (arbitrage) investors might want to take advantage of a gap vs. our $16 base case sum of the parts valuation, following recent portfolio change announcements. However, fundamental investors will likely continue to struggle with the company's Power business, where we see little scope for medium-term recovery, and we believe consensus is already giving credit for early traction on cost cutting initiatives."

Inch, who has a 15 price target, upgraded the stock to a hold given "modest upside" vs. his target. He had suspended coverage on March 29. The analyst correctly predicted both GE's dividend cut and booting from the Dow Jones industrial average.

He warned in January that the Boston-based conglomerate might get booted from the Dow blue-chip index, citing " earnings and cash pressure, tough global power generation markets, aggressive downsizing, shrinking its portfolio, management shake-up and SEC investigations." That prediction was realized in June.

In May 2017, Inch also warned GE's worsening cash flow could imperil shareholder returns. Roughly six months later, the company halved both its profit outlook and its prized dividend.

The stock's decline accelerated, with the yield rising to a current 3.4%.

General Electric rose 0.75% to 14.10 the stock market today but has nearly halved over the past year. GE stock continues to trade around its 50-day moving average within a monthslong consolidation. As trade war fears eased, GE's industrial conglomerate peers rallied after broad losses Wednesday. United Technologies (UTX) gained 1.3% and 3M (MMM) edged up 0.6%. Siemens (SIEGY) eked out a 0.8% gain and Honeywell (HON) rallied 2%.

GE Turnaround Strategy

The Boston-based company announced in June, after a yearlong strategic portfolio review, that "GE of the future" will focus on power, aviation and renewable energy, after divesting several other businesses.

Its aviation unit, which some analysts call the crown jewel in a vast portfolio, is set to benefit as Indian carrier Vistara plans massive expansion and eyes overseas growth.

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