Does GE Chief Executive Jeffrey Immelt Know Something We Don’t?

generalelectricGEGeneral Electric Company (NYSE:GE) CEO Jeffrey Immelt recently dropped $3.57 million buying his company’s shares, suggesting he believes a turnaround is taking shape.

According to SEC filings, Immelt bought 50,000 GE shares on the open market at $31.45 per share this week. That’s about $1.57 million in stock.

Back in May, he purchased 67,600 shares at an average price of $29.59, approximately a $2 million purchase.

So in the past two months, we’ve seen insider buying from the CEO to the tune of $3.57 million. These purchases don’t appear to be an options exercise or anything of the sort — the shares were bought with his own money on the open market.

A smart man like Jeffrey Immelt wouldn’t be making those bets without a good reason. So what is he thinking?

GE hasn’t exactly been performing well as of late. Although the stock is up almost 19% over the past year, it’s trailed the S&P 500 by a wide margin in 2016 (SPY has outperformed GE year-to-date by 6 full percentage points).

Immelt must see some catalysts on the horizon that could spike the share price. What those are is currently unclear.

Insider buying can sometimes be a good indicator of future price gains, particularly if insiders are buying during periods of strength. Investors should be wary when insider buying is done during weak periods, however. Sometimes insiders are simply too close to the situation and can’t recognize a sinking ship. That’s unlikely the case here with GE, however, which has recovered steadily over the past seven years after the financial crisis.

The company has sold off non-core assets and refocused on its businesses, and Immelt is simply betting that the turnaround he engineered will begin paying off soon.

GE shares posted small losses in Friday morning trading, down $0.09 (-0.29%) to $31.16. The stock is just about flat year-to-date.


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