Send me real-time posts from this site at my email
Motley Fool

Why General Electric Company's Shares Plunged Again on Tuesday

What happened

Shares of General Electric Company (NYSE: GE) fell as much as 8.2% in trading on Tuesday, continuing a plunge in the stock this week. Tuesday's drop was driven by RBC Capital analyst Deane Dray's downgrade of the stock, a turnaround from a formerly bullish view. At 3:20 p.m. EST shares were down 5.4% on the day.

So what

Dray was one of a small number of analysts who had a positive view of GE's stock but today downgraded the stock to sector perform. The turnaround plan will be "more protracted" than he previously thought. This continued a week of downgrades of GE from Wall Street analysts.

Image source: Getty Images.

The other bad news was that Fidelity Investments has cut its stake in GE by one fourth in the calendar third quarter. The filing on Monday showed that the fund giant now holds 93.2 million shares of the company's stock.

Now what

There's not a lot of hope for a quick recovery in GE's shares. Management outlined a long recovery plan on Monday, which included selling businesses and focusing the business on healthcare, aviation, and power generation. Those might be the right moves long term but it'll be a long time before GE is sustainably growing again and the recent cut of its dividend to $0.48 per share annually shows that there isn't much value left for investors in this formerly reliable stock.

10 stocks we like better than General Electric
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and General Electric wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 6, 2017

Travis Hoium owns shares of General Electric. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Cancel

Popular posts