GE’s New Push… Moving Executives Closer to High-Growth Markets (GE)

The gains of General Electric Co. (NYSE: GE) have yet to abate and the shares just have refused to pull back to a point to let new investors in at a cheaper price.  Generally speaking, speeches from a Vice Chairman might go without comment if financial guidance is not offered.  John Rice, Vice Chairman of GE, presented to a Barclays Capital Industrial Select Conference and offered up some insight on a newer strategy of the company: moving key management closer to its major customers in international growth markets.

There is a trend of ‘recentralizing’ to accelerate overseas sales.  Mr. Rice recently relocated to Hong Kong to lead international sales, but that gets him closer to local markets in China, India, and the Middle East.  The idea is to move more key executives who are the decision-makers closer to key customers now that GE is truly a global company.  The move aims to accelerate its international growth and to take better advantage of local opportunities as they arise.

Rice noted in the webcast that this will come via more partnerships that will also create more U.S.-based jobs.  What Rice did offer up was that GE continues to look for smaller bolt-on acquisitions in the $1 to $3 billion range.

GE shares are up another 1.6% at $21.20 and shares hit yet another 52-week high of $21.30 today. If you wonder why we noted the part about many new investors or under-invested investors have not been able to get in, it is because there has hardly been any pullbacks of late.  Shares were under $16.00 right around Thanksgiving.  Despite shares jumping about one-third since that time, there has yet to be anything remotely close to even a 5% pullback.

Sometimes you just don’t get to buy market leaders on your own terms.

JON C. OGG