Is General Electric (GE) Stock A Buy or Sell?

·5 min read

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is General Electric Company (NYSE:GE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is General Electric (GE) stock a buy or sell? Prominent investors were turning bullish. The number of long hedge fund positions moved up by 24 in recent months. General Electric Company (NYSE:GE) was in 69 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 74. Our calculations also showed that GE isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 45 hedge funds in our database with GE positions at the end of the third quarter.

Boykin Curry EAGLE CAPITAL MANAGEMENT
Boykin Curry EAGLE CAPITAL MANAGEMENT

Boykin Curry of Eagle Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 best cheap stocks to buy now to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). With all of this in mind let's check out the latest hedge fund action encompassing General Electric Company (NYSE:GE).

Do Hedge Funds Think GE Is A Good Stock To Buy Now?

At fourth quarter's end, a total of 69 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 53% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GE over the last 22 quarters. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

More specifically, Eagle Capital Management was the largest shareholder of General Electric Company (NYSE:GE), with a stake worth $1351.1 million reported as of the end of December. Trailing Eagle Capital Management was Pzena Investment Management, which amassed a stake valued at $970.5 million. Adage Capital Management, Southeastern Asset Management, and Trian Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to General Electric Company (NYSE:GE), around 7.81% of its 13F portfolio. Platinum Asset Management is also relatively very bullish on the stock, designating 7.67 percent of its 13F equity portfolio to GE.

With a general bullishness amongst the heavyweights, some big names have jumped into General Electric Company (NYSE:GE) headfirst. Viking Global, managed by Andreas Halvorsen, initiated the biggest position in General Electric Company (NYSE:GE). Viking Global had $315.4 million invested in the company at the end of the quarter. Patrick Degorce's Theleme Partners also initiated a $163.2 million position during the quarter. The other funds with new positions in the stock are Doug Silverman and Alexander Klabin's Senator Investment Group, Suzi Nutton (CEO)'s Lansdowne Partners, and Gregg Moskowitz's Interval Partners.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as General Electric Company (NYSE:GE) but similarly valued. These stocks are Rio Tinto Group (NYSE:RIO), Diageo plc (NYSE:DEO), GlaxoSmithKline plc (NYSE:GSK), Stryker Corporation (NYSE:SYK), Booking Holdings Inc. (NASDAQ:BKNG), The Goldman Sachs Group, Inc. (NYSE:GS), and Uber Technologies, Inc. (NYSE:UBER). This group of stocks' market values resemble GE's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RIO,26,1711997,3 DEO,23,667041,4 GSK,30,1742036,-1 SYK,44,3222907,-4 BKNG,108,8247434,-5 GS,76,4607743,6 UBER,135,10094450,35 Average,63.1,4327658,5.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 63.1 hedge funds with bullish positions and the average amount invested in these stocks was $4328 million. That figure was $5685 million in GE's case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand Diageo plc (NYSE:DEO) is the least popular one with only 23 bullish hedge fund positions. General Electric Company (NYSE:GE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GE is 58.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on GE as the stock returned 16.6% since the end of Q4 (through 3/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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