- General Electric removed John Flannery as CEO on Oct. 1, 2018.
- The corporate change caused shares to rise above 13 percent.
- GE is one of the largest industrial companies in the U.S.
Energy conglomerate General Electric (GE) suddenly removed CEO John Flannery from his position on Oct. 1, 2018, causing shares to rise above 13 percent, CNBC reported. The stock surge placed the company on track for its biggest single-day gain since March 2009, according to MarketWatch, a welcome sight after years of profit loss and competition from renewable resources.
The GE turnaround appears to be good news for investors, but here are some numbers to figure out whether you should put your faith in one of the largest industrial companies in the U.S.
|What GE Is Worth|
|GE Share Price, 52-Week Range||$11.21-$24.89|
|GE Market Cap, 52-Week Range||$97.4B-$216.3B|
|GOBankingRates’ Evaluation of GE Net Worth||$139.8B|
|All information on 52-week range accurate as of Oct. 1, 2018.|
Also See: Real Talk With GE’s Ex-CEO Jack Welch
|CEO Larry Culp Salary||Unknown|
GE Market Cap Range: $97.4B-$216.3B
Market capitalization is determined by the total dollar value of a company’s outstanding shares, which helps investors determine the relative size of a company. GE’s market cap range, with a 52-week high of $216.3 billion, reflects how the market as a whole values the company. GE had a very rough 2017, during which poor accounting and haphazard acquisitions led the company to cut its dividends by 50 percent.
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GE Net Worth: $139.8B
Although market cap can give you a sense of how much the market values a company, it’s not strictly accurate because it’s based entirely on market sentiment — essentially reflecting the frequently changing opinions of investors. The GOBankingRates Evaluation, on the other hand, calculates a company’s net worth based on measurable figures like assets and revenue. It’s a more conservative valuation than the market value, taking into account full-year profits and revenue from the last three years, as well as the company’s assets and debts.
Based on GE’s revenue and profits from the last three years, the company is worth over $139 billion.
GE’s New CEO: Danaher’s Larry Culp
GE installed Larry Culp as its new CEO after Flannery’s ouster. Having previously served as industrial manufacturing company Danaher’s CEO, Culp is the first outsider to helm GE in its more than 120 years of operation.
Culp, 55, is tasked with accelerating the company’s plan to streamline, which Flannery was criticized for handling too slowly, reported Bloomberg. Culp is credited with successfully expanding Danaher, a global science and technology company, over the course of 14 years. Over 90 percent of the transactions Culp handled during that time were company takeovers, according to Bloomberg.
Should You Invest in GE Stock?
Although news of new leadership caused a jump in stock, GE still has ways to go before it completely restores the faith of its investors. The company’s debt has almost tripled since 2013, and the company also said it’d take a $23 billion noncash charge for its failing power business, adding that it will not meet expectations for free cash flow in 2018, CNBC reported.
Most analysts are recommending to either buy or hold on to GE stock, so perhaps the optimism is contagious.
Click to keep reading about what $1,000 in GE and other stocks invested 10 years ago would be worth today.
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Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.