3 Reasons to Sell General Electric


The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor and analyst Austin Smith and senior technology analyst Eric Bleeker discuss topics across the investing world.

In today's edition, Eric and Austin discuss three reasons investors may consider selling shares of General Electric. While this is not an explicit buy or sell recommendation, it's important for investors to weigh each side of the buy or sell coin for every position. Austin thinks that a lack of dividend from GE Capital to the parent company would be a worrying sign about the underlying strength of the division, which remains GE's largest. An inability to make meaningful strides in energy infrastructure would render their China XD Electric acquisition meaningless and likely stunt future growth, as a massive part of GE's future lies in energy infrastructure. Overly restrictive regulation from the finance sector following the missteps of JPMorgan and other major finance firms could result in restrictive regulation being placed on the GE Capital division, and further reduce the potential for profitability there.

Admittedly, there are still likely more reasons to buy than to sell General Electric, not the least of which is its impressive dividend. In fact, the dividend is one of the most common reasons investors buy shares in the first place. As good as its dividend is, though, it still wasn't picked for our list of 9 Incredible Dividends.You can read about those companies that were, though, right here.

At the time thisarticle was published Austin Smithhas no positions in the stocks mentioned above.Eric Bleekerhas no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.