General Electric Company (NYSE:GE) has fallen on hard times.
The industrial behemoth, collapsing under the weight of shortsighted acquisitions and massive pension obligations, has seen its shares plunge more than 24%Â in 2018 alone, and 56% over the past 12 months.
Past looks at the value of GE’s individual businesses â also known as a “sum-of-the-parts” analysis â cast doubt on whether a fire sale of GE’s assets would even fetch today’s price at $13.28 per share. But Melius found that spinoffs from U.S. industrial companies return twice the value of the broader stock market, revealing a more optimistic forecast for GE.
“GE’s [sum-of-the-parts] as an example â¦ likely undervalues the assets by 25 percent or more,” Melius wrote.
General Electric Company (GE - Get Rating) has been spinning off units at a rapid rate to raise cash. It also slashed its dividend and buyback programs to boost liquidity. More unit sales — and layoffs — are likely coming soon, and the question remains whether the once-mighty company can ever generate solid returns for shareholders ever again.
General Electric Company shares closed at $13.07 on Friday, down $0.28 (-2.10%). Year-to-date, General Electric Company (GE - Get Rating) has declined -24.48%, versus a -2.91% rise in the benchmark S&P 500 index during the same period.