General Electric (GE) - buy at $6 (or $10)

Today's Enterprise Value $580 billion (approx. 19x EBIDTDA - $11 share)


Buy at $10 - acceptable risk
Buy at $6 a share - good risk

Background:
The Good -
GE has paid a dividend since 1899
At $10 share its (reduced) dividend of 10 cents a qtr. = decent return

The Bad -
GE's management is self dealing + arrogant + average performers.
GE's books are not exactly 'high quality'. Management is doing its best to clean up its books, but the process (already under way for 4 years now) is going to take another few years. Management is skilled enough to unwind the dreck without a Enron type implosion. However, who wants to own a company that you know has questionable accounting ?

The Ugly -
GE has almost $5 a share cash on hand, coarse implication is that market values shares at merely 2x cash on hand.....not exactly a sign of confidence.