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Sunday, 02/18/2001

GE - General Electric

Company Description

GE is a diversified services, technology and manufacturing company with a commitment to achieving customer success and worldwide leadership in each of its businesses. GE operate in more than 100 countries and employs nearly 340,000 people worldwide, including 197,000 in the United States. John F. Welch has been Chairman and Chief Executive Officer of GE since 1981. Jeffrey R. Immelt was named President and Chairman-Elect of GE in November 2000.

The Company traces its beginnings to Thomas A. Edison, who established Edison Electric Light Company in 1878. In 1892, a merger of Edison General Electric Company and Thomson-Houston Electric Company created General Electric Company. GE is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896.

(source: General Electric)

Reasons to Invest

GE is one of the most diversified businesses in the entire world. Its operations encompass aircraft engines, consumer appliances, capital services, business-to-business exchanges, medical systems, NBC television and plastics, among many others. Because of its broad product and service reach across many, many industries and vastly diversified operations, GE is closely tied with the broader business cycle in the United States and the global economy. The business cycle has been declining for quite some time now as measured by gross domestic product (GDP) in the United States and globally, along with other economic growth indicators.

However, the Federal Reserve along with several other central banks of leading economies have been on the offensive in a collective effort to fend off recession and stimulate the global economy. As long as these central banks proceed with their respective benign monetary policies, the prospects for GE will remain bullish. Indeed, many economists are expecting the global economy to rebound in the second-half of calendar 2001, which will greatly benefit GE.

While the current business cycle and lower interest rates concern the short- and intermediate-term, long-term investors need not worry about such events. In fact, the recent weakness in shares of GE, which stems from the aforementioned global slowdown, may represent a compelling opportunity for the long-term investor. What's important to focus on with GE is the company's diversity in operations, which lends to relatively stable and reliable earnings growth. Moreover, the company is viewed as a breeding ground for superior management and leadership, as epitomized by its current chief, Jack Welch. Although Mr. Welch is soon retiring, the tradition of financial out performance and superior management will continue at GE.

Although we've preached how diversified GE is, we must reiterate that fact again for a different reason. Because GE is so diversified, the company and its stock are often referred to as bellwethers for the U.S. economy and financial markets. The point is that GE represents a good representation of several industry groups. As such, if a long-term investor wanted to start investing with only one stock, GE would probably be the most prudent company to invest with.

DRIP Information:

Shares to Qualify = 1            Accept Foreign Accounts: Yes
Auto-reinvestment = yes          Temper Enrollment Serv: Yes

Min/Max Investment = $10 - $10,000/week
Reinvestment Fees:
Dividend: 0        Cash: $3      Auto Reinvest: $1

Transfer Agent:

GE Stock Direct
c/o Bank of New York
P.O. Box 19552
Newark, NJ 07195-0552
1-800-STOCK-GE (1-800-786-2543)

Fundamentals            Company Profile

Industry Group: Diversified Ops   52-week high=$60.50
Annual Dividend Per Share=$0.64   52-week low =$41.69
Last earnings 12/00    est=0.36   actual=0.36
Next earnings 03-15    est=0.30   versus=0.26
                                  P/E = 37

Analyst Ratings:
Strong Buy    = 12
Moderate Buy  =  3
Hold          =  1
Moderate Sell =  0
Strong Sell   =  1

Six Month Chart of GE


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