Will General Electric (GE) Stock Be Affected By Monsal Acquisition?

NEW YORK (TheStreet) -- General Electric Co. (GE) announced today that it's acquiring Monsal, a privately held U.K.-based water, waste, advanced anaerobic digestion, and integrated biogas-to-energy business for an undisclosed amount.

The purchase will allow GE to "help municipalities and industrial manufacturers shift from disposing wastewater treatment byproducts to generating renewable energy and other value from their streams," the company said.

"The acquisition of Monsal will enhance GE's wastewater treatment product offerings and further GE's commitment to energy reduction in wastewater treatment," GE added.

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Separately, Alstom (ALSMY) announced on Tuesday that will be seeking shareholder approval for its $16.9 billion deal with GE in the fourth quarter, Reuters reports. 

Shares of GE are up 0.44% to $26.40 in mid-morning trading on Tuesday.

Separately, TheStreet Ratings team rates GENERAL ELECTRIC CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENERAL ELECTRIC CO (GE) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GE's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $4,961.00 million or 7.61% when compared to the same quarter last year. In addition, GENERAL ELECTRIC CO has also modestly surpassed the industry average cash flow growth rate of 3.59%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • GENERAL ELECTRIC CO's earnings per share declined by 17.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL ELECTRIC CO increased its bottom line by earning $1.47 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.47).
  • The gross profit margin for GENERAL ELECTRIC CO is rather high; currently it is at 51.60%. Regardless of GE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.82% trails the industry average.
  • You can view the full analysis from the report here: GE Ratings Report
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