Headquartered in Boston, Massachusetts, General Electric is one of the largest and most diversified companies in the world as of September 2020.
The company was founded in 1892 by the fabled inventor, Thomas Edison. General Electric is now a technology and financial services giant that operates in 5 key segments: Power, Renewable Energy, Aviation, Healthcare and Capital.
The company’s story is as electrifying as the history of technology in the US and the entire world.
Back in 1896, General Electric was one of 12 companies that constituted the Dow Jones Industrial Average (DJIA) and over a century later, it is the only surviving constituent of the index, of the 12 companies. That is not their only historical milestone.
In the early 1900s, General Electric introduced voice radio broadcasting through RCA and also revolutionized home cooking through the introduction of electric toasters and hot plates.
Their response to the 1930s great depression included allowing customers to pay for their electronic gadgets over an extended period. It is also well documented that General Electric was the first business to own a computer in the 1950s as well as the biggest user outside the US government.
The 1970s saw the company transition successfully to the energy sector and in the late 20th and into the 21st century, General Electric cemented its place among the top 30 Fortune 500 companies in the world.
While a predominantly industrials company, General Electric now derives much of its profits from its Capital segment. General Electric has always maintained an active portfolio throughout its history, making strategic mergers and acquisitions over the years to ensure its longevity.
Some of their major buys include Instrumentarium for $2.4 billion in 2003; Avio Aero for $4.3 billion in 2012; and LM Wind Power for $1.7 billion. General Electric is listed on the New York Stock Exchange and falls in the Industrials sector, under the Specialty Industrial Machinery stocks. It trades under the ticker symbol GE.
GE Stock History
In its history, General Electric has had 7 stock splits as follows: a 2-for-1 on June 8th 1971; a 2-for-1 on June 2nd 1983; a 2-for-1 on May 26th 1987; a 2-for-1 on May 16th 1994; a 2-for-1 on May 12th 1997; a 3-for-1 on May 8th 2000; and a 104-for-100 on February 26th 2019.
General Electric has always been an influential company in history, but its stock has always struggled to see the light. Its stock initially rallied from a split-adjusted price of circa $1 in the early 1980s and printed an all-time high at just above $60 in August 2000.
Concerns over the future direction of the business at the turn of the millennium triggered a selloff that saw the stock tumble to lows of circa $20 by February 2003.
The company’s upturn in fortunes then inspired a feeble rally that topped out at circa $42 by October 2007, before the effects of the 2008 global financial crisis sent the stock to lows of circa $7 by March 2009.
A multi-year rally then followed, with GE printing a top at circa $16, after which the stock plunged to circa $6.
General Electric has always been a consistent dividend payer, but it can arguably be said that this has been one of the reasons the stock has not performed particularly well in recent years.
How to Trade GE Stock
As an iconic company in American history, GE is one of the most followed stocks on Wall Street. Here are some of the factors to consider when trading GE stock:
- Tariffs and Trade Agreements
With operations all around the world, General Electric revenues and profits can be impacted by varying tariffs and trade agreements in the numerous jurisdictions it operates in.
- Legislative and Taxation Policy
As a truly global company, General Electric was famously hailed as a ‘boundary-less company’. This has always meant that the company is exposed to legislative and taxation policies that may target any one of the major industries they are operating in such as Healthcare and Finance.
- Lawsuits and Negative PR
General Electric may have stood the test of time, but its stock has always succumbed to negative PR and public lawsuits. A case in point would be in the early 1980s when the GE stock faced massive pressure after the company was controversially linked to the development of nuclear weapons as well as the purchase of news company, NBC.
- New Products Rollout and Technological Innovation
General Electric operates in the technology space where innovation is key. Granted, it remains one of the biggest suppliers to the US government, but if it lags in developing new products, it may be left with huge overrun costs that will significantly impact its overall profitability. As an age-old company, General Electric is also harshly judged by investors on its ability to innovate to ensure its survival in the modern age.
- Periodic Earnings Reports
General Electric’s fiscal year runs from January to December and the company releases quarterly and annual reports that paint a clear picture on the health of its business. In recent years, the company has admittedly underwhelmed. This means that during earnings season, investors are usually interested in metrics such as asset sales and cash flow.
Why Trade GE Stock with AvaTrade
Here is why you should trade GE stock with AvaTrade:
- International Regulation
AvaTrade is regulated in 7 jurisdictions around the world. Trade GE stock as well as other financial assets with maximum peace of mind, so you can focus on your trading activities.
- Leverage Trading
Trade GE stock with a leverage of up to offered by AvaTrade and take advantage of marginal price changes.
- Go Long or Go Short
Short sell the GE stock without any restrictions and trade even when prices are falling. With GE facing challenges in recent times, there might be regular short-selling opportunities on the stock CFDs.
- Trading Conditions
Trade GE with great trading conditions at all times including competitive spreads and fast execution.
- Comprehensive Trading Resources
AvaTrade offers handy resources that can help traders to get the most out of their trading activities. In addition to an in-depth and updated education section, there is also the AvaProtect risk management tool that allows investors to hedge their trades against losses.
Light up your GE stock trading on the AvaTrade platform today!
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General Electric Stock FAQ
- Why should I trade General Electric shares?
General Electric is one of the largest industrial conglomerates, and after a turnaround plan that’s taken a decade to implement, the stock might be ready to return to favour. That could yield a long and healthy rally for shares, and would make the stock well worth trading. In fact, in looking back at the long-term chart of the stock it seems like a rally now is in the cards, although the stock remains in a long-term down trend for the time being. The $20 level would be the logical top for the stock if it follows the same pattern seen since 2000, but that’s still nearly double current levels at the end of 2020.
- Is General Electric the best industrial conglomerate stock for trading?
General Electric was an excellent stock to trade for a very long time, so long as you were shorting the stock. And AvaTrade made that very easy with our CFD instruments. As of late 2020 it appears the stock may have bottomed and it could be looking to put in the next up leg in its downtrend. Or, if its turnaround plans are finally bearing fruit, we might see the stock finally lift off and put an end to the downtrend that’s been weighing the stock down since 2000. Either way we think General Electric will be a very good industrial stock for traders in the coming years.
- What’s the best strategy for trading General Electric shares?
With its smooth price action and long trends you could use a basic moving average crossover system to trade General Electric and would find it to be quite successful. This strategy is to simply buy when price crosses above the moving average line, and sell when it moves below the moving average line. You can choose which period to use, but we think that a 10-day or 20-day moving average might be too short and cause whipsaws. Instead use a longer period like a 35-day or a 50-day moving average.