August 10, 1995
General Electric (95 shares)
TYPE: Foolish Four Dow Dividend stock
Phone: (203) 373-2459
Closing prices, August 9th, 1996: Bid $83 5/8, Ask $83 3/4
Trailing 12-month revenues: $73.2 billion
Trailing 12-month EPS: $4.14
Last quarter reported: June 1996 (FY: Dec)
Next quarter report date: October 17, 1996
Consensus EPS estimates for quarter: $1.08e vs. $0.96
Dividend yield: 2.20%
---->Trade: Selling 95 shares, August 12th-August 16th
INTRODUCTION AND CONCLUSION
Over the past year, we have written extensively with regard to our admiration of CEO Jack Welch and the performance of his company and his stock. And yet, for the life of us, to this day we're still not exactly sure what GE does! Oh sure, we know Gen'l 'Lectric is a leader in aircraft engines, power plants, home appliances, broadcasting, and financial services among a thousand other things, and we've had frequent occasion to mention those in our Fool Portfolio daily recaps. But really, in the end, how would the company describe itself if the phrase "diversified conglomerate" were to disappear from the language? General Electric, the industrial concern? The financial powerhouse? The media giant? This is exactly the kind of company that must give sector investors massive migraines.
But it's the very sort of company that gives long-term buy-and-hold investors early retirement. The long-term performance of this stock is phenomenal, as is its huge and constantly-burgeoning size, and its management which somehow manages to keep it well-organized and profitable. And so, though we don't quite know what to make of General Electric, General Electric knew quite well what to make for the Fool Portfolio. A little more than 2,300 smackers is what it has made, clearing the 40%-return hurdle even though the stock is down from its 52-week high of $88. For those of you who have not looked, the Foolish cost basis for General Electric is only a dollar above its 52-week low -- not bad at all. The Fool Portfolio was a proud owner of these General Electric shares, and we find it difficult to part with them. We urge other shareholders to consider not doing so, given that this is a superb long-term outfit.
But for our part, we are slaves to our Foolish Four approach, which we love just slightly more than GE. Thus, next week we shall turn in our GE uniforms and sport some other Dow-beatin' duds. Who knows? Maybe AT&T will actually outperform GE stock one of these years. Maybe even this one.
--Randy Befumo, Fool HQ