Investors who were initially positive on General Electric Co. (GE) quarterly results on Wednesday, Jan. 24, put renewed pressure on the stock after the disclosure of an investigation by the U.S. Securities and Exchange Commission, even though some analysts don't see cause for serious concern.

"We've been notified by the SEC that they are investigating the process leading to the insurance-reserve increase and fourth-quarter charge, as well as GE's revenue recognition and controls for long-term service agreements," GE Chief Financial Officer Jamie Miller said on the conference call with analysts. "We are cooperating fully with the investigation which is in very early stages."

Miller said the company is going through "a very deep review" of its finances but said she's not overly concerned about the probe at this time.

Last week, the Boston-based industrial conglomerate stunned investors after announcing that it would book a $6.2 billion charge to its fourth-quarter earnings related to weakness in its North American Life & Health insurance portfolio. GE also said that its financing arm, GE Capital, would make $15 billion in payments over the next seven years to shore up NALH's statutory reserves, starting with around $3 billion in the first quarter of this year, and approximately $2 billion annually from 2019 to 2024. GE Capital will also suspend its dividend to GE "for the foreseeable future," the company said.

GE CEO John Flannery.
GE CEO John Flannery.

"This announcement immediately took steam out of the stock as it represents a headline risk into GE's practices, and we want to reiterate that this investigation reflects more on the previous management team who oversaw the company, and not the current regime," TheStreet's Jim Cramer, who owns GE for his Action Alerts PLUS charitable trust, wrote in a note to subscribers. "Accordingly, we do not hold [Chief Executive John] Flannery responsible for the past transgressions, but it is still up to him to move past the negative headlines through focus on the turnaround of the company and not the hand he was dealt."

General Electric is holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GE? Learn more now.

"When you look at why the charge came, it was over things that came 10 years ago," Brian Langenberg, an industrial strategist at Langenberg & Co., told CNBC on Wednesday. "Do I see that investigation as some kind of existential threat? No."

Shares of GE erased earlier gains, falling 2.6% to $16.44 by the close.

Aside from the SEC probe, the company with a market capitalization of $142 billion missed fourth-quarter earnings and revenue guidance but retained its 2018 adjusted earnings guidance of $1.00 to $1.07 per share.

"We view GE's unchanged 2018 outlook as an important signal that incremental negative surprises (beyond GE's recent insurance reserve update) may be more limited than some investors anticipate," Citi Research analyst Andrew Kaplowitz wrote in a Jan. 24 research note. The firm has a Buy rating on GE stock with a $24 price target.

Kaplowitz also highlighted the company's near-term cash generation as a key metric for investors to watch, noting that the company's fourth-quarter adjusted industrial cash flow from operating activities, or CFOA, of $7.8 billion was well above company guidance. For the full year, GE reported adjusted industrial CFOA of $9.7 billion, surpassing guidance of about $7 billion.

The better-than-expected cash flow was "driven by improved progress collections and working capital execution," Deutsche Bank analyst John Inch wrote in a Jan. 24 research note.

GE, excluding Baker Hughes (BHGE) , ended 2017 with $11.2 billion in cash. To be sure, the company borrowed $11.9 billion net, and "GE would have run out of money if it were not for accelerated borrowings," Inch said. Deutsche Bank has rated GE stock at Sell with a $15 price target.

Still, management was encouraged by the company's current cash position and said that "execution on cash is improving." Flannery noted on the conference call that GE plans to increase its cash balance in 2018 and exit the year with $15-billion-plus of cash.

"Overall, while the results were poor, we are encouraged that positive steps are being made to the cash flows and the visibility of the company," Cramer and the AAP team said. "We reiterate that Flannery is doing the best he can with the poor hand he was dealt, and his pragmatic approach has been respectable."

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