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General Electric’s stock is having one of its best quarters in nearly five decades.
Shares of the industrial giant are up more than 34 percent so far this year, putting it on track for its second-best quarterly performance since at least 1971. But the torrid run hasn’t been enough to sway two market watchers.
“From my perspective, GE’s an absolute dumpster fire,” Mark Tepper, president and CEO of Strategic Wealth Partners, told CNBC’s “Trading Nation” on Thursday.
The investment expert stressed that he wouldn’t go “anywhere near” shares of GE, which has been under pressure amid leadership changes, spinoff plans, the sale of its high-performing biopharmaceutical unit and less-than-favorable announcements regardingcash flow.
“We’re not interested in investing in companies that are hyper-focused on unloading assets to pay off their debt,” Tepper said, adding that he was disappointed that GE sold its biopharma unit, which he considered one of its “crown jewels.”
“Basically, they sold off a good business to pay off debt. Then you’ve got GE Financial, and that’s just a black box,” he said. “Open it up and who knows what kinds of skeletons you’re going to find in the closet. And, quite frankly, investors don’t like unknowns. GE is one big unknown. Investors don’t like zero visibility. With GE, you don’t know what you’re getting, so how do you put a valuation on it? So we’re going to stick with companies that actually have a growth plan, not a debt management plan.”
Bill Baruch, president of Blue Line Futures, was similarly unimpressed with GE’s recent actions.
“I don’t see much of a trend here at all. I don’t see a reason to chase this price action,” he said in the same “Trading Nation” interview, noting the stock’s chart is showing “a lot of resistance overhead” despite GE not doing anything explicitly “wrong” in recent weeks.
“I see no reason to buy it here, and if you had bought it much lower, I’d look to capitalize on what you did,” Baruch said.
GE shares are up more than 34 percent for the quarter starting Jan. 1, their second-best quarterly run since company data started being collected in 1971. The stock has shed nearly 24 percent in the last 12 months.
