Stock performance

General Electric (GE) stock has made a remarkable run in 2019. So far, the stock has risen 46%. General Electric has beaten all of the major US indexes and its industrial peers. YTD (year-to-date), the Dow Jones, the S&P 500, and the NASDAQ have gained 14.5%, 17.8%, and 21.3%, respectively.

General Electric Stock Has Risen 46% in 2019

General Electric stock has also outpaced the Industrial Select Sector SPDR Fund’s (XLI) returns. XLI, which invests in S&P 500 industrial stocks, has gained 20.8% in 2019. General Electric stock’s YTD gain was higher than other industrials stocks’ returns. United Technologies (UTX) and Caterpillar (CAT) shares have risen 22.1% and 5.2%, respectively. 3M (MMM) has lost 8.7% of its market value in 2019.

What’s behind the rally?

The heightened liquidity crisis, dividend cuts, and dismal quarterly performances led to a massive sell-off in General Electric stock last year. The stock fell to a ten-year low of $6.40 on December 11, 2018.

However, CEO Larry Culp’s quick actions to implement restructuring initiatives and strengthen the balance sheet helped General Electric regain investors’ confidence, as reflected in the YTD stock performance.

After becoming the CEO in October last year, Culp undertook several restructuring initiatives. Reducing General Electric’s stake in Baker Hughes (BHGE), divesting the healthcare equipment portfolio, revising the spin-off and merger terms with Wabtec, and cutting dividends were some of Culp’s most notable efforts. The strategies mentioned above helped General Electric retain $10 billion in cash in the fourth quarter of 2018.

Culp found a buyer for the BioPharma business unit in the first quarter. The company signed a definitive agreement with Danaher (DHR) to sell the unit for $21.4 billion, which would help reduce its debt.

Latest articles

On September 14, drones attacked Saudi Arabia Aramco's oil-infrastructure. Saudi Arabia's oil production has fallen by 50%.

Apple Arcade (AAPL) is a subscription gaming service that was unveiled at Apple’s annual event last week. The service will launch on September 19.

Cannabis legalization is gaining traction not only in the US but also globally. The third presidential Democratic debate was held on September 12.

Google has agreed to make a one-time settlement of over $945 million euros to the French ministry. The ministry accused Google of evading taxes.

In Q4 2018, legendary investor George Soros sold all his holding in Apple (AAPL). In Q3 2018, Apple represented around 0.2% of his total portfolio.

Jim Chanos, the founder and president of Kynikos Associates, is a long-time short-seller of Tesla stock. Tesla stock has fallen 17.5% in the last year.