This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Siemens Lands New Partner to Unplug General Electric From Alstom

Immelt met with the French economy minister Arnaud Montebourg and affirmed him that upon closing of the deal that GE would not cut any French jobs. This wasn't enough. Montebourg wants Alstom back on its feet and independent from any deal.

He says he wants France to create "two European and world champions in the fields of energy and transport." And I don't' believe he sees a future with GE in that scenario. For GE, things have just gotten harder with Siemens having joined forces with Mitsubishi Heavy.

Three weeks ago, while speaking to investors, Jeff Immelt said, "We wouldn't have started [the bid the Alstom] if we didn't think we could finish." He added, "It's a deal that's executable. It's a deal we're experienced in."

Investors need to hope he's right. In the most recent quarter, the company posted 14% revenue growth in both aviation and power/water segments, its two largest industrial businesses. This is while GE's oil and gas division posted revenue gains of 27%.

GE wants to leverage these gains by increasing its exposure in untapped markets. Alstom's power business will help GE achieve this objective and then some. And when you combine Alstom with GE's return to an industrial focus, these shares, which are still down 35% from their 2007 high, are a bargain.

At around $27 per share, these shares are a sure bet to $35, assuming that GE can grow its revenue at a long-term rate of 4% to 5%. This is also assuming a return to the low teens in free cash flow margins. Investors should hope that this deal gets done and Immelt is able to close.

IBM Sees the Cloud's Silver Lining Expanding Big Blue Horizons

Why Apple's Overseas Tax Probe Is a Black Eye on U.S. Lawmakers

Prospect Capital Wins Surprise Concession From SEC

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GE $29.89 -0.60%
AAPL $93.24 -0.41%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs