Buyers of General Electric shares have said that they believe their investment will yield solid returns in the future.
2018 was not a great year for GE shares as it traded at $6.66, falling significantly from its 2016 record of $32. Surprisingly, the dramatic fall in price seems to be attracting investors who see beyond the present predicament of General Electric Co.
The investors are optimistic that the new CEO Larry Culp will improve the state of things in the company leading to an increase in the price of its shares.
The stock buyers, who are not in a hurry to get a return on their investment, are hopeful that the U.S. conglomerate will deliver on its plan to turn things around for the better.
Investment officer Garry Lenhoff, who bought some General Electric shares last year, says that his timeline for investment returns is three years. He opined that the G.E shares will offer one of the best returns on investment as the business is worth more than people think.
General Electric Co. has said that it is taking steps to improve profitability in the power division which produces and services turbines. Although earnings are not expected from the division this year, investment analysts say the turnaround plan will eventually pay off.
Golub Group portfolio manager, Michael Kon has said that it takes time to revive a power business. “it’s not something that you can do in six months. It may take about a year or two to achieve” he said.
Shareholders expect General Electric Co. to improve its balance sheet and pay off some of its debt by the end of the year. With Culp as GE’s chief executive officer, investors believe that better days are ahead. In an effort to preserve cash, the CEO reduced the quarterly dividend of the company to a penny per share. Culp, who assumed office in October, worked with Danaher Corp, and during his tenure, the company’s shares soared.