No wonder why value-seeker Warren Buffett hasn't stepped up to buy a nice chunk of the battered General Electric (GE) via Berkshire Hathaway (BRK.A) (BRK.B) , as was rumored to be in the works lately. 

Billionaire Buffett probably sees what others on Wall Street see: a lumbering industrial giant that is still a potential value trap for investors. 

GE shares dove as much as 1.3% on Monday as JPMorgan analyst Stephen Tusa called GE one of the most expensive industrial stocks around. He reiterated an underweight rating on the stock and an $11 price target, or about 15% lower from current levels.

To call GE an expensive stock is a slap in the face to any value investor that has been nibbling of late. Consider some of the valuation metrics on GE after a 58% rout over the past two years:

  • On a forward price-to-earnings multiple basis, GE's stock trades at an approximate 26% discount to the S&P 500. 
  • On paper, GE's stock is noticeably more attractive than the 10-year Treasury note. GE's dividend yield stands at 3.6% vs. the 10-year note at 2.7%.  

Lesson: A cheap stock is cheap for a reason, and could become even cheaper. In the case of GE, a rough two years financially, ongoing restructuring and significant uncertainty on how the company will look five years from now suggests the stock isn't cheap enough. 

Hat tip, Mr. Tusa.

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