Melissa MacPherson ’19 pitched General Electric (GE) to the Student Managed Investment Fund (SMIF) on April 8, 2019. Founded in 1892 by Thomas Edison, GE transformed from focusing on lighting / electrical appliances to becoming a multinational industrial company in the 1980s with the rise of former CEO, Jack Welch. Although GE’s recent history has highlighted numerous difficulties from poor leadership, bad investments and over extension, the company has faced its nadir leading to the price being currently undervalued. Looking forward, GE is well positioned for upside due to:
- Key changes in management and leadership with the new CEO, Larry Culp;
- Active realignment of company strategies to improve GE’s financial position;
- Ability to build and streamline company focus on strong core business segments, including: Aviation, Power, Renewable Energy, and Healthcare.
The class voted to buy 1600 shares of GE and sell out of Electronic Arts (EA) at market price for a total amount of ~$12,500 and fund the rest with cash.