Last week, analysts parsed 303 filings and collected 34,774 data points. In total, they made 6,193 accounting adjustments with a dollar value of $4.3 trillion.
Based on the linear equation within, the stock is worth ~$18/share if we assume that GE can maintain its current ROIC of 3% and not accelerate growth. That downside translates into a loss of $125 billion in market cap or $13 per share (43%) for investors.
Investors who ignore unconsolidated subsidiary assets are not getting a true picture of the cash available to be returned to shareholders. By adding unconsolidated subsidiary assets one can better understand the value of the stock to shareholders. Diligence pays.
This report is one of a series on the adjustments we make to convert GAAP data to economic earnings. This report focuses on an adjustment we make to convert the reported balance sheet assets into invested capital.
Picking from the multitude of sector mutual funds is a daunting task. In any given sector there may be as many as 234 different mutual funds, and there are at least 632 mutual funds across all sectors.
Be wary of advice from the bandwagon riders. They care more about getting more people in the bandwagon than anything else.
The Starbucks (SBUX) bandwagon is a big one. I am not on it.
The Industrials sector ranks sixth out of the ten major sectors as detailed in our sector roadmap. It gets my Neutral rating, which, like my fund ratings, is based on aggregation of stock ratings for each of 430+ companies in the sector.