5 Beaten-Down Turnaround Candidates for 2018

Print Email
General Electric, or General Eclectic?

General Electric Co. (NYSE: GE) was down close to 45% in 2017, and while it was the worst Dow stock of 2017 it got off to a great start. It’s way too soon to see a turnaround early in 2018, but later on in the year this may be more of a turnaround if some things can continue. If not, let’s just say that the pitch-story that newly appointed CEO John Flannery will have is to break GE up into pieces to start over.

Analysts were burned so badly by Jeff Immelt’s tenure, and the post-Immelt period was one in which Flannery simply has not been able to recapture the company’s narrative. It was just too easy to blast GE and its disappointing past. Now GE is valued at closer to 18 times earnings for 2017 and 2018, if the company lives up to these slashed expectations. And oil prices and gas prices have firmed up enough (over $60 a barrel oil) that the Baker Hughes situation (and ultimate exit) may be tenable again. And of course GE stands to win big in the world of jet engines with all of the new planes out in recent years and coming into the fleets in the next decade.

At $17.34 at the end of 2017, GE was trading at $18.28 after a week of trading in 2018. It has a 52-week range of $17.25 to $31.84, and it had a consensus analyst target of $21.99 at the end of the year. The market cap is $150 billion. GE still pays a dividend yield of 2.8%.

A montage of charts from Stockcharts.com for each of these stocks, versus the Dow and S&P 500, over the trailing months has been shown below.

 

I'm interested in the Newsletter