NEW YORK (TheStreet) -- Shares of General Electric (GE) - Get Report were higher in early afternoon trading on Monday after the digital industrial company said it would combine its energy business with Baker Hughes (BHI) to form a $32 billion oil and gas company.
Baker Hughes shareholders will receive a one-time cash dividend of $17.50 per share after the transaction's close, which is anticipated in mid-2017.
GE will own 62.5% of the combined group and Baker Hughes shareholders will own the remaining 37.5%.
CEO of GE's oil and gas unit Lorenzo Simonelli will be CEO of the combined company. The new group will retain the Baker Hughes name.
The big industrial name has been mired in downward spiral since the gap lower from the July earnings date (on the chart).
We connect the lower highs and the resistance is in place. However, this past week shows there was probably a bottom built. We would not look for anything too big here, but certainly the 200-day moving average just under $29 is a good target.
Momentum has started to pick up as well, and if it weren't for a late day selloff for the market over some macro news, we would have seen General Electric settle near the highs for October.
However, we have to wait and see if November is gentler for this giant. Relative strength is solid, but we could use some follow-through this week.
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Separately, 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 articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B-.
The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and notable return on equity. We feel its strengths 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