General Electric Co. (NYSE: GE) stock rose nearly 3% to a 52-week high of $28.99 Friday morning after posting better than expected earnings.
The rise has General Electric (NYSE: GE) stock trading at its best level in seven years.
Trading volume was extremely high this morning. More than 39 million shares had changed hands in just the first hour of trading today. GE stock's average daily volume is 47.83 million shares.
Before the open, GE reported adjusted Q3 2015 earnings per share (EPS) of $0.29. While down from $0.38 in the same quarter a year ago, it bested analyst estimates of $0.26.
Revenue slipped 1.3% to $31.68 billion in the quarter. The company reported a 16% revenue drop in its segment that supplies equipment services to oil and gas customers. However, revenue in other essential units was steady.
Revenue in GE's aviation arm grew 5%. Revenue in its biggest segment, water, increased 1%.
GE is still in the midst of spinning off its financial business. The finance arm once accounted for about half of GE's earnings.
Over the last year, GE has made an aggressive shift to focus on its core industrial businesses, including aviation, energy, transportation, and healthcare. GE's goal is to generate 90% of its profits from its industrial units by 2018, up from 55% in 2013.
GE's finance unit, which fell under the U.S. Federal Reserve's "to big to fail" label, was becoming a serious drag amid numerous regulatory issues.
Earlier this week, GE sold $300 billion in commercial lending and leasing businesses to Wells Fargo & Co. (NYSE: WFC). General Electric has now signed deals for almost all of its financing businesses.
GE also said it will launch a share exchange for Synchrony Financial (NYSE: SYF), its consumer finance arm, next week. The exchange is expected to result in a 6% to 7% reduction of GE's roughly 10.1 billion outstanding shares.
The Synchrony exchange, along with some $3 billion in dividends from its GE Capital unit, puts the company on track to return roughly $30 billion in 2015. GE plans to return $90 billion to investors through 2018.
Year to date, GE stock is up 12.7%. In the same time, the Dow Jones Industrial Average has dropped 3.7%.
And according to Money Morning experts, General Electric (NYSE: GE) stock is still a great stock to buy and hold now...
Diversification Spurs General Electric (NYSE: GE) Stock
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Money Morning Executive Editor Bill Patalon recommended GE shares this summer, citing both its numerous products and heavy insider buying.
"GE is in several growth segments: aircraft engines, medical-imaging equipment, power generation, water treatment and, as a great special 'kicker' - the 'Internet of Everything' (IoE)," Patalon said. "Demand in each of those sectors is only going to grow, so GE can take comfort in knowing there will be plenty of demand for its wares long term."
Another bullish sign for GE stock is the robust insider buying. According to Patalon, that is the "single-biggest indicator that a stock is going to move higher."
In 2014, CEO Jeffrey Immelt bought an additional 40,000 shares of GE. That brought his total investment to more than $47 million worth of GE stock. And he wasn't the only one. Two other independent GE directors also scooped up 14,000 shares combined that year.
Corporate insiders sell their company's shares for many reasons, Patalon explained, but buy for only one: "They see a chance to make money on their own stock."
Another key draw is GE's 3.25% dividend yield.
Stay informed on what's going on in the markets by following us on Twitter @moneymorning.
Profit Alert: Since Money Morning Executive Editor Bill Patalon launched his Private Briefing program just a few short years ago, he's recommended 192 stocks that have either doubled or tripled in value. The service has completely revolutionized the way people invest. Keep reading to find out more about his extensive research and premium stock picks...
Related Articles:
- The Wall Street Journal: General Electric Earnings: What to Watch
- USA Today: GE Earnings Top Wall Street Forecasts
- CNBC: GE Posts Earnings Beat; Revenue Miss