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| | General Electric Company
Description of the Business
General Electric (GE) is a conglomerate. It is engaged in diversified technology, media (NBC Universal) and financial services (GE Capital)
Analysis of Competitors
GE is active in many businesses. They have many competitors in the different industries.
Competitive Advantages
GE had a triple A rating, but lost this rating in 2009. However they still have a very strong rating and financial position. Because of their diversified businesses and high credit ratings GE is less vulnerable if certain business are underperforming as this can be compensated by other businesses. Their strong capital position also provides them opportunities to buy companies during an economic crisis.
Financial Analysis
The financial strength is strong even though they lost their triple A rating.
Their profit margin is about 10% and the ROE is about 20%. They have more than 40 billion dollars in cash.
Risks
A economic downturn would negatively impact GE profits and revenue.
Management Team
GM has an experienced management team.
Valuation Calculation
The cash flow value of GE is $20.
We assign a $2 value because of the strong balance sheet and the strong credit ratings/
The total value of GE is $22 a share.
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