4-Star Stocks Poised to Pop: General Electric

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Based on the aggregated intelligence of 110,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, industrial behemoth General Electric (NYSE: GE) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at General Electric's business, and see what CAPS investors are saying about the stock right now.

GE facts:

Headquarters

Fairfield, Connecticut (1892)

Market Cap

$278.89 billion

Industry

Conglomerates

TTM Revenue

$180.38 billion

Management

CEO Jeffrey Immelt (since 2001);

CFO Keith Sherin (since 1998)

Return on Equity (avg. last three years)

18.4%

CAPS members bullish on GE also bullish on

Apple (Nasdaq: AAPL),

Johnson & Johnson (NYSE: JNJ),

Cisco Systems (Nasdaq: CSCO)

CAPS members bearish on GE also bearish on

Ford Motor (NYSE: F),

Microsoft (NYSE: MSFT),

Google (Nasdaq: GOOG)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 1,640 of 1,745 of the All-Star members who have rated GE -- some 94% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include HARTLESS63 and my fellow Fool TMFDitty, both of whom are ranked in the top 5% of our community.

In May, HARTLESS63 noted that GE is a "well diversified powerhouse of a company making everything from light bulbs to jet engines. GE will benefit from weakened dollar with an increase in exports."

Two weeks later, TMFDitty echoed that bullish sentiment, focusing on the bargain-like opportunity that the shares seem to be providing:

I know, I know. The chances that I'm seeing something in as hi-profile a stock as GE, that the rest of the world is missing, are just about nil. Regardless, I'm looking at a dominant media and industrial titan here, selling for 10x trailing free cash flow, expected to grow at 11% going forward, and paying nearly a 4% dividend.

What can I say? It all looks very cheap to me, and I can't help but be a buyer here.

What do you think about GE, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 110,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Apple is a Motley Fool Stock Advisor recommendation. Johnson & Johnson is an Income Investor pick. Microsoft is an Inside Value selection. And Google is a choice of Rule Breakers. Try any of our Foolish newsletters today, free for 30 days.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 28, 2008, at 4:48 PM, mbfenner wrote:

    I'm worried about their financial side which accounts for more than 40% of its revenues. How sure can we be sure that everyone they've loaned/leased to is going to be able to pay if we go into a recession?

  • Report this Comment On July 28, 2008, at 7:45 PM, aw4golf wrote:

    GE is solid with multiple products that emerging countries need. If they got the hipe that the no product company, Google, gets their shares would be $10000 each.

    Does Google pay a $.31 dividen each Qtr?

    Buy GE now and be safe.

  • Report this Comment On October 27, 2008, at 6:55 PM, WhidbeyIsland wrote:

    Nothing like hindsight is there.

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