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For better or worse,
General Electric(GE - Get Report) is your prototypical industrial name. The firm is involved in a bevy of heavy manufacturing segments, from making jet engines to wind turbines and medical equipment.
It was also the most heavily bought industrial stock in the final quarter of 2011 -- institutional investors picked up 76 million shares in the quarter, adding onto a massive position in the firm. For example,
Bridgewater Associates increased its position in the stock by 18.8%, to 1.11 million shares, while
Mairs & Power scooped up an additional 21,560 shares. GE is also one of
Warren Buffett's stocks.
GE's businesses look disparate at first, but in reality, the firm is able make the puzzle pieces fit together and share technologies and customers across business lines. The wind turbine business, for instance, can benefit from the advances that the firm is making in the jet engine business -- and the firm can make money by financing all of those customers through its GE Capital arm.
The financial services unit was a black eye for GE just a few years ago as the economy got shaky; while most of the concerns about GE capital have abated, the financing business still makes up a very large part of GE's overall business. That's something buyers should keep in mind when they take on positions in GE.
Financially, this firm is in strong shape. While industrial manufacturing is a capital-intense business, GE carries significant cash reserves -- plenty to cover its 3.47% dividend yield (it's one of the
top-yielding industrial stocks). Investors looking for industrial exposure in 2012 could do worse than this blue-chip.
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