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GE is having its best year in two decades, but trader says it's time to stay away

VIDEO3:0203:02
Stay away from GE here, trader warns

GE hasn't had a year this good during this millennium.

The one-time Dow stock has surged more than 40% in 2019, tracking for its best performance since 1999.

But after that massive move, analysts are beginning to back off the stock. UBS downgraded its rating to hold from buy on Monday, while Morningstar lowered its expectations last month.

That wait-and-see approach makes the most sense, says Michael Bapis, managing director at Vios Advisors at Rockefeller Capital.

"It's still difficult to assess," Bapis told CNBC's "Trading Nation " on Monday. "They've done these spinoffs, they've sold off some of their businesses [but] they still have high debt. And I think people are confused on … what earnings are going to grow, or are they going to grow."

Profits are expected to fall 37% in its second quarter, according to FactSet estimates, marking its ninth straight quarter of earnings contraction. The company is scheduled to report earnings on July 31.

"We're advising our clients at Rockefeller just stay away from the name. Let's look and see what happens over the next six months," said Bapis. "Let's see what happens when they start getting earnings and they figure out the direction they're going to head as a company."

Bapis says there's still plenty of opportunity elsewhere while investors play the waiting game on GE.

"Large industrials, large financials, just the large-cap sector — there's so many other places to go that are much more attractive and transparent than what's going on here" with GE, he said.

Ari Wald, head of technical analysis at Oppenheimer, echoes Bapis' caution.

"Here's a stock that's 60% higher from its December low, but also 60% lower from where it traded two years ago," said Wald. "That says that both the bear and the bull case is likely exhausted here."

GE is trading at the same level as in October. It remains 82% below its 2000 peak.

"The charts tell a similar story where it is indeed above its 200-day average, but really hasn't made any meaningful higher high in a number of years," he added. "I see a trendless-priced stock that is trading between $9 support and $11 resistance."

GE would need to rally 9% to reach Wald's resistance target at $11. It spiked above that level in February, though failed to hold it.

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