GE below $9 per share---compelling?
Best Answer
4085 points
EthanR answered 9 months ago …
There was a time when I would see a stock with a double digit dividend yield, and I would say to myself, "so even if they cut the dividend in half, I still get 6 or 7% yield, which is good". WRONG! Look at the bank stocks. A dividend cut from 32 cents per share to a penny per share!
I own 100 shares of this crappy company from much higher levels, and the only reason I haven't sold is because I'm convinced that a half hour after I sell the stock will for whatever reason catapault higher. It's illogical, sure, but I'll just make it a loooooooong term hold at this point.
I would say that the best time to buy it would probably be after they announce their dividend cut. The stock could go up or down on that news, but at least it will be out of the way. But I don't find anything compelling about GE at $9. Wasn't it compelling at $12 and $15 and $20 to someone? You may just find it compelling at $7 in another few weeks! I hate GE!
Answers
2222 points
readytoretire answered 9 months ago …
Maybe. But the risk is not small. The analysts have talked about GE needing to reduce its dividend to save cash. And every time it is mentioned, GE takes a big hit. Under normal times, it would have only taken only one hit, but in these times, it takes a hit every time. And when they do reduce their dividend, it will take another hit. They had said that the dividend was good for this year, but that was months ago. Not sure I want to take that bet.
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435 points
larryat36 answered 9 months ago …
If you have enough time it might be a good long term investment. I have been playing some options with this high volotility and made a little.. I do believe the dividend will probably be cut, which might be a good time to pick up some shares at rock bottom. If you don't mind waiting. I think it will be fine in the long term
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115 points
YankeeDoodle answered 9 months ago …
I think it is a greaay price for GE. I just sold some cash covered puts to get in which can get you in now at around $8 / share. With a $1.24 dividend, that is paying 15%. Next step, assuming I am put the stock (which I hope I will), will be to set up a collar around the stock (Sept put & call, both strike @ 9) which I can do with a very small profit (basically free).
Thus, I'll be sitting with little downside risk, and I'll collect 15% dividend. Worst case, GE drops their dividend or the price goes way down, and then I can sell @ 9.
I figure it is a good way to park my $ until Sept anyway.
Dan
