NEW YORK (TheStreet) -- Digital industrial company General Electric (GE) - Get Report has confirmed that it is in discussions with oilfield services provider Baker Hughes (BHI) about potential partnerships but not an "outright purchase" of the company.
GE should acquire Baker Hughes rather than sell the company assets, TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning.
"If they offload their assets right here, that is just classic buy high, sell low," Cramer stated. "That would be very disappointing."
He explained that the oil industry is in the first quarter of a long-awaited turnaround.
Baker Hughes and fellow oilfield services provider Halliburton (HAL) both said on their conference calls that business has turned "rather dramatically," Cramer pointed out.
Baker Hughes and Halliburton provide "tremendous value" with oil prices as low as $30 or $40 a barrel, he added.
Cramer remembers GE's arguments for entering the oil industry when the commodity was near $100 a barrel. It doesn't make sense for the company to sell assets when the time has finally come to be a buyer.
"You don't want to be a seller," he argued. "You would look back and you'd really regret it."
Shares of GE and Baker Hughes were both trading higher Friday morning.
(General Electric is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B-.
GE's strengths such as its revenue growth, impressive record of earnings per share growth and notable return on equity outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: GE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.