GE stock is a ‘screaming buy,’ a ‘spectacular opportunity,’ strategist says

General Electric shares have fallen 42 percent this year, on pace for their worst annual performance since 2008.

While some may view the stock as a no-touch at current levels, Larry McDonald, founder of the Bear Traps Report, sees it as a "screaming buy," even with the company slashing it dividend in half. Here's why.

• "I'm watching GE because it's a spectacular opportunity. People are heading for the exits at a pace which we haven't seen since the Great Depression, or the 2008 financial crisis," McDonald said Thursday on CNBC's "Trading Nation." He added that this sets up a "very unusual opportunity" to buy the stock, which closed Thursday at $18.25 per share.

• Moody's Investors Service on Thursday downgraded GE's credit quality due in part to "extreme deterioration" in the company's energy business, though it maintained a stable outlook. This doesn't surprise McDonald, who said the credit markets are rather unconcerned with the company's credit quality.

• "It's really an intermediate story. Over the next six months the risk-reward on GE is fantastic, and it's really a screaming buy here," he said.

• The stock has fallen nearly 11 percent in the last week.

Bottom line: McDonald says General Electric stock is a buy at these levels given the risk-reward he sees, and how far the stock has tumbled.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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