GE trading higher

General Electric (GE) is trading about 6% higher with a few news items lifting sentiment.

GE Transportation announced today that GE’s Evolution Series locomotive has been commissioned and officially released to Egyptian National Railways (ENR) at the end of June. GE’s Evolution Series is the most technologically advanced diesel electric, heavy-haul locomotive in the world. Best-in-class fuel efficiency, higher pulling capability with less wheel slippage, and measurably higher reliability and lower maintenance costs are just a few of the reasons GE’s Evolution Series locomotives are in demand.

The Evolution Series is a global locomotive platform that has had nice success since GE delivered the first 300 locomotives to the Ministry of Railways in China. Other significant orders include forty heavy-haul Evolution Series locomotives to Rio Tinto Iron Ore and Zazakhstan’s 310 locomotive orders.

GE Energy, meanwhile, said in this Bloomberg article that their microgrid power system could pay for itself in four-years.

This is just a small example of what I have harped on in the past (See March 3, March 19, July 7) -- GE’s industrial businesses have tremendous upside because of the demand from developed and emerging nations for their technologically-advanced products. And it's the industrial businesses that will make pay off for the patient, long-term investor.

Also lifting sentiment was reports that Universal Pictures’ Bruno opened a the top film at theaters in the U.S. and Canada over the weekend with the $30.4 million in ticket sales for distributer NBC Universal. Sales should provide a boost to Universal Pictures, which ranked last among the six major studios in 2009 ticket sales with $604.3 million as of July 9.

Adding fuel to GE’s surge was analyst Meredith Whitney’s upgrade of Goldman Sachs, which helped lift sentiment for financials, including GE Capital. This is slightly odd that other financials would benefit because Whitney thesis isn't an improving economy, but rather the weaker economy will boost Goldman who will play a key role in the “tsunami of debt issuance from federal, state and local governments ramping up debt issuance to fund woefully underfunded budget gaps."

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Peter J. Lazaroff