After being pummeled in the 2008 financial crisis and sharply rebounding last year, General Electric
Nonetheless, I was surprised to find out that last year, GE was the No. 1 stock owned by investment clubs, as measured by the folks at Better Investing. If retail investors were so keen on the stock, it got me to thinking: What's the consensus sentiment view on GE?
Turns out, almost everyone is bullish. Let's have a look at a few key sentiment drivers.
1. Analyst opinion
Analysts are unanimous in their belief in GE. Data from Yahoo! Finance captures the love-fest:
2. Insider buying
Over the past year, GE insiders have sold $93,150 worth of their company stock. During the same time period, insiders bought $837,820 worth of GE stock. The net effect, then, is insider buying to the tune of $744,670. (Data from Form4Oracle.) While that's not exactly a meaningful amount of the $220-billion-plus company, the trend is positive: Insider buying far outweighs insider selling.
3. Guru buying
Next, we'll look at "guru" ownership of the stock. Gurus are split on GE. On one hand, Fairholme's Bruce Berkowitz disclosed a new stake in GE in the fund's most recent 13-F filing.
On the other hand, Fairfax Financial, headed up by the legendary Prem Watsa, sold its GE stake during the summer.
Two investors for whom I have deep admiration with opposite takes on the same stock? Let's call this a split.
4. Retail investor community sentiment
For community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. General Electric has a respectable four-star rating in CAPS.
Next we'll look at whether short-sellers are circling the stock.
There are 61.6 million GE shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 0.6%. That's not very high -- a struggling operator like Barnes & Noble has a short interest of 13.5% right now -- and so for determining sentiment, we'll take it as a good sign.
6. Does Buffett own it?
This is the "cherry on top" test, and in GE's case, it passes: Berkshire Hathaway owns shares of GE.
Adding it up
GE is liked by analysts, insiders, the CAPS community, and Buffett. Short-sellers aren't targeting the stock, and gurus are split. Add it all up and GE comes out a stock with a general aura of bullishness.
Of course, you can't base an investment philosophy on who likes the stock you like, and a consensus opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." There's hardly a "greedy" sense surrounding GE right now, though.
The purpose of this exercise wasn't to make a definitive buy-or-sell call on GE. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on GE's movements, and for more analysis on GE, make sure you add it to your Watchlist.
Fool.com managing editor Brian Richards does not own shares of any companies mentioned. Berkshire Hathaway is a Motley Fool Inside Value selection and a Motley Fool Stock Advisor recommendation. 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 Fool owns shares of Berkshire Hathaway and has a disclosure policy.