Tag Archives: Electric

4 Surprising Side Effects of Electric Autonomous Vehicles
June 3, 2018 6:03 am|Comments (0)

, From Chicago, I write about green technology, energy, environment. Opinions expressed by Forbes Contributors are their own.

LAS VEGAS, NV – The Nissan IMx, an all-electric crossover concept vehicle offering fully autonomous operation and a driving range of more than 600 kilometers, is on display during CES 2018 at the Las Vegas Convention Center earlier this year. (Photo by Alex Wong/Getty Images)

First of two parts

Electric autonomous vehicles are expected to drastically reduce greenhouse gas emissions, traffic congestion, parking demand, insurance costs and traffic fatalities. They’ll eliminate the 90 percent of traffic accidents attributed to human error.

Those effects are well celebrated. But they will likely have some equally startling side effects, once the three trends of electric drive, connectivity and autonomy converge.

“Those three items collectively will lead to a big change in the way we travel,” said Edward J. Regan, senior vice president of the consulting firm CDM Smith. “The convergence of these things will have a big impact, and it’s going to affect people’s decisions on how they travel and if they choose to own a car.”

The big trigger point will come when vehicles achieve level-five autonomy, Regan said, operating completely driverless without geographic restrictions. When that happens, according to Regan and other experts at the Transport Chicago Conference in Chicago Friday, we’ll see side effects like these:

1 Cars Will Last Longer

Because they have fewer moving parts and don’t rely on explosive heat, electric vehicles are expected to last longer than internal combustion vehicles. According to Regan, they could last almost five times longer.

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4 Surprising Side Effects of Electric Autonomous Vehicles
June 3, 2018 6:03 am|Comments (0)

, From Chicago, I write about green technology, energy, environment. Opinions expressed by Forbes Contributors are their own.

LAS VEGAS, NV – The Nissan IMx, an all-electric crossover concept vehicle offering fully autonomous operation and a driving range of more than 600 kilometers, is on display during CES 2018 at the Las Vegas Convention Center earlier this year. (Photo by Alex Wong/Getty Images)

First of two parts

Electric autonomous vehicles are expected to drastically reduce greenhouse gas emissions, traffic congestion, parking demand, insurance costs and traffic fatalities. They’ll eliminate the 90 percent of traffic accidents attributed to human error.

Those effects are well celebrated. But they will likely have some equally startling side effects, once the three trends of electric drive, connectivity and autonomy converge.

“Those three items collectively will lead to a big change in the way we travel,” said Edward J. Regan, senior vice president of the consulting firm CDM Smith. “The convergence of these things will have a big impact, and it’s going to affect people’s decisions on how they travel and if they choose to own a car.”

The big trigger point will come when vehicles achieve level-five autonomy, Regan said, operating completely driverless without geographic restrictions. When that happens, according to Regan and other experts at the Transport Chicago Conference in Chicago Friday, we’ll see side effects like these:

1 Cars Will Last Longer

Because they have fewer moving parts and don’t rely on explosive heat, electric vehicles are expected to last longer than internal combustion vehicles. According to Regan, they could last almost five times longer.

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Charging Electric Scooters Is a Profitable, Fun—and Occasionally Dangerous—Youth Trend
May 20, 2018 6:01 pm|Comments (0)

The newest big trend in tech startups is in turn fueling an emergent youth culture, as teenagers and young adults spend their free time collecting and charging electric scooters. Some compare it to a game—one that they’re getting paid pretty well for playing, but also comes with some real-world risks.

As reported by The Atlantic, the part-time gig is sometimes called ‘Bird hunting.’ That name comes from Bird, the most prominent company in a wave of new “dockless” scooter and bike rental startups, which use smartphone apps to both rent and track light vehicles.

The systems offer a potentially innovative solution to urban transportation, particularly what’s known as the “last mile” problem: how to get users of public transit from stations to their doorsteps. Because they can be dropped off anywhere, the rental vehicles can be more convenient for riders than personal scooters or bikes (though they can also, according to some city officials, create a “public nuisance”).

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The apparent convenience of those systems, though, is created by a lot of behind-the-scenes work, much of it done by contractors, known as “chargers,” who collect and charge the scooters. Several young chargers described their work to The Atlantic as a fun side-hustle—one even compared it to playing Pokémon GO, since it involves using an app to find the GPS-tagged scooters. The “prizes” for finding scooters are also game-like, with chargers paid more for retrieving scooters that are harder to find. Young chargers report teaming up to do the work faster, starting what amount to small businesses with some socializing thrown in for good measure.

Rewards can range up to $ 20 for a single scooter, and chargers described making up to several hundred dollars per night. Those rewards are likely to decline, assuming that Bird and other startups are following the standard tech-industry model of sacrificing revenue for market share early on (at least $ 250 million in venture capital supports Bird and similar companies). But the game-like aspects of charging may make workers less price sensitive.

That said, just as Uber has become a primary source of income for many of its drivers, it’s clear that recharging scooters is not a game for everyone. Chargers interviewed by The Atlantic describe occasional conflicts over scooter bounties, manipulation of the reward systems, and outright theft of the scooters, which criminals have been known to chop up for parts. Perhaps worst of all, some report that criminals are hunting the hunters—using scooters as bait, then mugging the chargers who arrive to retrieve them.

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Electrified roads: Swedish project could slash cost of electric vehicles
May 14, 2018 6:01 pm|Comments (0)

OSLO (Reuters) – An electrified road in Sweden that is the first in the world to charge vehicles as they drive along is showing promise and could potentially help cut the high cost of electric cars, project backers Vattenfall [VATN.UL] and Elways told Reuters.

The state-funded project, named eRoadArlanda and costing about 50 million crowns ($ 5.82 million), uses a modified electric truck that moves cargo from Stockholm’s Arlanda airport to Postnord’s nearby logistics hub to test the technology.

A electrified rail embedded in the tarmac of the 2-km-long (1.24 miles) road charges the truck automatically as it travels above it. A movable arm attached to the truck detects the rail’s location in the road, and charging stops when the vehicle is overtaking or coming to a halt.

The system also calculates the vehicle’s energy consumption, which enables electricity costs to be debited per vehicle and user.

Elways’ chief executive Gunnar Asplund said the charging while driving would mean electric cars no longer need big batteries — which can be half the cost of an electric car — to ensure they have enough power to travel a useful distance.

“The technology offers infinite range — range anxiety disappears” he said. “Electrified roads will allow smaller batteries and can make electric cars even cheaper than fossil fuel ones.”

Asplund said the Swedish state, which is funding the project, was happy with the results so far, with the only issue — now resolved — having been dirt accumulating on the rail.

Elways has patented the electric rail technology and is part of a Swedish consortium backing the eRoadArlanda project that also includes infrastructure company NCC and utility Vattenfall, which provides power from the national grid to the rail.

“Such roads will allow (electric vehicles) to move long distances without big, costly and heavy batteries,” said Markus Fischer, a Vattenfall spokesman, adding that installing the arm in new cars would be cheaper than retrofitting current models.

Vattenfall said in a statement electrified roads could reduce carbon dioxide emissions from lorries, which account for about 25 percent of total road traffic emissions.

“The investment cost per kilometer is estimated to be less than that of using overhead lines, as is the impact on the landscape,” it added.

Testing at eRoadArlanda started in April and will last at least 12 months so that the electric truck can use it under different weather conditions.

Editing by Catherine Evans

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Audi eyes 800,000 electric and hybrid car sales in 2025
May 8, 2018 6:07 pm|Comments (0)

BERLIN (Reuters) – German premium brand Audi on Tuesday said it plans to sell about 800,000 battery-electric and hybrid powered cars in 2025, as it seeks to catch up with electric car rival Tesla and emerge from a damaging emissions-cheating scandal.

The logo of the German car manufacturer Audi is pictured at the training center during a media tour in San Jose Chilapa, Mexico April 19, 2018. REUTERS/Henry Romero

Audi’s image has been tarnished by regulatory probes investigating what role its engineers may have played in designing engine management software to cheat modern emissions tests.

Audi will launch more than 20 electrified vehicles by 2025 thanks to an ability for using parent Volkswagen’s (VOWG_p.DE) new MEB modular platform and vehicle underpinnings jointly developed with premium sibling Porsche, it said.

That’s slightly more ambitious than the 20 electrified vehicles Audi had previously guided for. Audi said it would launch the cars without undermining its 8-10 percent operating margin target.

Audi declined to provide details about how many fully battery electric, and how many hybrid cars it will sell by 2025. Last year, it sold about 16,000 semi-electric vehicles and it still lacks a fully electric model in its lineup.

The Ingolstadt, Germany-based brand, which delivered 1.88 million cars globally in 2017 currently offers three plug-in hybrid vehicles.

In August, Audi will launch the e-tron sport utility vehicle, its first serial all-electric model.

Demand for large sports utility vehicles has helped make Audi Volkswagen’s main profit driver.

On Tuesday Germany’s Transport Ministry said the KBA vehicle authority was investigating a further 60,000 diesel-engined Audi cars for suspected illegal manipulation software which may have helped the carmaker cheat emissions tests.

To fund its electric-vehicle offensive through to the middle of the next decade, Audi has extended by three years until 2025, an investment program worth about 40 billion euros ($ 47.42 billion), it said.

To free up funds for its electric-car push Audi is ceasing production of some models, including two-door versions of its A1 and A3 vehicle lines, as well as cutting component and administration costs. It now aims to save at least 10 billion euros by 2022.

($ 1 = 0.8435 euros)

Reporting by Andreas Cremer; Editing by Edward Taylor

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General Electric: Finally, It's Over
April 23, 2018 6:11 pm|Comments (0)


Image Source

So far, the word “unpredictable” seems to be one of the most-used descriptive choices when characterizing the events of 2018. And, broadly speaking, this appears to be an accurate term. Just a few months ago, if you were to suggest that the NASDAQ would be seeing “flash crash” activity while General Electric (NYSE:GE) was forming a long-term bottom in a multi-year decline, you might have been laughed out of the room. But this appears to be where we are, given the market’s positive reaction to GE’s April 20th announcements and the generalized lack of certainty in almost every aspect of this current financial environment. We have been saying that the stock declines below $ 13 per share would be the worst of it for holders of GE and we maintain this view in light of the company’s recent strategic moves. We are long GE with a bullish stance on the stock as a long-term hold for portfolio strategies.

Chart: CNN Money

Many analysts have argued that there are fundamental earnings problems within the company itself. But, since this is the most “mega” of the “mega-conglomerates” it is critical to assess the trends over at least three years before drawing any drastic conclusions. The earnings performance at GE has been erratic since 2015. But the revenue side of the equation has been much more stable over the same period.

This implies that GE’s problems are internal (fixable) rather than external (not fixable). This is good news, as long as the company is able to reduce operations and focus on the businesses. Currently, jet engines, power plants, and healthcare machines are GE’s biggest money-makers – and we would prefer to see more of the company’s attention (and resources) focused on streamlining these segments.

Earnings Trend Chart: Yahoo Finance

On the other side of the ledger, the power, oil, and gas markets are still presenting major challenges for General Electric, with revenue in those segments showing significant weakness in Q1. Operating losses in the power unit were lower by 38%, but the company has said that improvements have been made in service operation and cost execution for the segment. Operating losses in oil and gas fell by 30%. Other negatives were seen in the GE Capital unit, as it continues with its weaker trends.

For the first quarter, net losses came in at 14 cents per share (roughly in-line with last year’s performance for the period). On a continuing basis, net incomes came in at 4 cents per share (a solid increase from the in the 1 cent per share seen a year ago). On an adjusted basis, the company posted earnings of 16 cents per share (well above analyst estimates calling for 11 cents per share). Total revenues for the quarter gained by 7% (to $ 28.66 billion against expectations of $ 27.45 billion). In the accompanying statement, Flannery highlighted the fact that margins, industrial earnings, and free cash flows are all gaining on an annualized basis – and this is all good news for dividend investors.

What really matters here is the strategic direction, and the willingness within those in management to cut the fat and become a more modern company. There are still very real questions with respect to whether or not Flannery & Co. will be able to address those needs. But we do know that many of the correct moves have already been made. This includes the decisions to sell NBC, Universal Studios, and its real estate portfolio.

These were areas where the company could not reasonably hope to compete, and sacrifices needed to be made in order to preserve as much of the dividend as possible. Another example of a strategic move in the “right” direction was deal to sell GE’s appliance division for $ 5.6 billion. GE is still in recovery-mode, and this is the short-term outlook that should define the long-term outlook for quite some time.

GE Chart Analysis: Dividend-Investments.com

The key point here is that the word “recovery” implies gradual strengthening. In market terms, that equates to positive price movement, and we view GE as a long-term hold with an attractive yield offering for investors. GE cut industrial structural costs by $ 805 million, and they expect to beat prior goals to reduce costs by $ 2 billion for all of 2018. This is strong evidence of progress, and it has not yet been reflected in share prices.

Shorter-term, we have seen some upside and this is an indication that the market is liking what it sees (so far, at least). Since aviation, healthcare, and transportation divisions all experienced double-digit profit growth, these moves should be viewed as valid. Prior resistance under $ 14 should now be expected to act as price support and we believe that a long-term bottom has likely formed at $ 12.80.

What is your position on GE? We look forward to reading your comments. Stay tuned to Dividend Investors and receive our next alerts by clicking the “Follow” button at the top of the page.

Disclosure: I am/we are long GE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Electric Scooter Startups in Battle with San Francisco 
April 17, 2018 6:01 pm|Comments (0)

This is a guest post by Applico CTO and Principal Tri Tran. Prior to joining Applico, Tri was the co-founder and CEO of Munchery. 

After years of public battles with Uber, San Francisco has learned some valuable lessons. 

This time around, three electric scooter rental companies – Bird, Lime and Spin – are trying to roll out their service in downtown San Francisco. But the city is fighting back. As I happen to live in San Francisco and work in downtown, I’ve been able to witness this battle first hand.

Fast Rollout

As a startup entrepreneur, I quickly recognized the strategies that these three companies have taken to maximize business traction in as short a time as possible:

  • Flood a certain limited geography (such as downtown San Francisco) with a lot of scooters.
  • Get as many people as possible using them, very quickly. Once certain critical mass is reached, perhaps leverage them and their loyalty to fight off any regulations.
  • The default is seeking forgiveness afterward instead of seeking permission prior to operating. Let the city take any actions it needs to, assuming it’s historically very slow to react anyway.

I would not be surprised if these three companies also employ “fake” users and have them ride the scooters around town to create buzz, and thus word of mouth referral.

The City Fights Back

To my surprise, the city worked quickly and City Attorney Dennis Herrera issued cease-and-desist orders to all three companies.

The city wants the scooter companies to take actions to:

  1. Keep users from riding scooters on sidewalks
  2. Keep scooters from blocking sidewalks when parked
  3. Ensure that riders use helmets

It’s all in the name of public safety. Until then, the city will impound these scooters and may issues fines of a minimum of $ 125 for each violation. That is unless the companies can abate the problem within 30 days or prevail in an appeal hearing.

What Will Happen Next

It is not clear what these companies would do next, but here’s my take:

  • These three companies don’t have the operations to meet the city’s demand for the above described points
  • Limiting riders from sidewalks and ensuring unused scooters not block sidewalks is too tall of an order

Technically, it’s entirely possible to track riders on where they ride and whether they had left the scooters on sidewalks. They can even issue fines to riders who disobey such rules. But these rules would be a direct conflict to the convenience of ride-wherever and park-wherever, and thus would greatly reduce the attractiveness of using their scooters in the first place.

So what should they do? San Francisco has clearly established that it can move fast to regulate AND has created a repeatable process to impound these scooters.

Not complying will simply be too costly. More importantly, San Francisco also provides a model for all other cities to copy if/whenever the service rolls out to their cities. That’s bad news for Bird, Lime and Spin.

Ultimately, the service that these scooter companies provide is convenient, but not nearly as convenient as Uber was when it first arrived and replaced the painful taxi experience.

Additionally, the immediate public disruption of a horde of unfamiliar vehicles taking over sidewalks is much more apparent. Scootering on the streets has its own dangers as well when mixed with automobile traffic. The bike accident rate in San Francisco hasn’t changed much in the past few years. Relatively few people will brave their lives for that convenience.

Thus, these scooter companies will not have similar leverage nor political power from their small user bases to what Uber had when it fought against regulation attempts.

Based on the above, my prediction is that this service will go down into history as a fail, at least in major U.S. cities. It’s not necessarily a bad thing as these entrepreneurs will have learned a lot from the experience. They may find better, more sustainable businesses as a result. Cities are still grappling with what the future of transportation looks like, as are entrepreneurs. Scooters may not be it.

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Indian ride-hailing firm Ola to launch 10,000 electric vehicles over 12 months
April 16, 2018 6:00 am|Comments (0)

NEW DELHI (Reuters) – Indian ride-hailing firm Ola, backed by Japan’s SoftBank Group will launch 10,000 electric three-wheelers in the country over the next 12 months as part of a broader electrification plan, the company said in a statement on Monday.

FILE PHOTO: An employee speaks over his phone as he sits at the front desk inside the office of Ola cab service in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India, April 20, 2016. REUTERS/Anindito Mukherjee/File photo

The move is part of a broader push by Ola to launch 1 million electric vehicles on its platform by 2021, it said in the statement, adding that it will work with various state governments, vehicle manufacturers and battery companies to meet its target.

Reporting by Aditi Shah; Editing by Swati Bhat

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China and the Children Will Save Electric Cars From the EPA
March 31, 2018 6:00 am|Comments (0)

Efforts to put cleaner cars on American roads are being threatened. In a few days, The New York Times reports, the Environmental Protection Agency will move to weaken the regulations that demand automakers producer cleaner and more efficient vehicles.

The existing standards, which Barack Obama pushed for in 2012, demand each automaker nearly double the average fuel efficiency of its cars, to deliver 36 miles per gallon. But before President Donald Trump, EPA head Scott Pruitt, or anyone else can knock that number down, they must tangle with California. The state had rules to battle govern tailpipe emissions before a 1970 amendment to the Clean Air Act gave the EPA the authority to govern vehicle efficiency. Because of its early bird status, and especially grave pollution problem at the time, Congress gave California the unusual right to keep making its own regulations, even though federal rules should supersede state ones. No other state can do this, but they may opt to follow California’s rules, which tend to be more stringent than whatever Washington drums up. Today, 13 states and Washington DC do so.

Together, those states (which, unsurprisingly, cover most of the East and West Coasts) account for a third of the American car market. So automakers have long built vehicles that meet California’s tougher rules. It may sound like a pain, but it’s cheaper than building two versions of every car—the cleanish one for most of the country, and the cleaner one for the folks who like their air salty but clean. And so lowering the national standards is only effective if you can get California to lower its too.

Pruitt, a climate change skeptic, has signaled he’s ready—and right—to wrestle the grizzly bear. “California is not the arbiter of these issues,” he told Bloomberg this month. But four decades of legal precedent don’t vanish without a fight, certainly not quickly. “We’re prepared to do everything we need to defend the process,” the state’s attorney general, Xavier Becerra, told the Times.

Okay, but say Pruitt gets his way, California loses its special status, and automakers no longer have to meet such tough efficiency and emissions standards. First off, don’t expect coal rolling poor Prius drivers to become the new national sport. “We’re not gonna go sliding back to the gas guzzling 80s,” says Rebecca Lindland, an industry analyst with Kelley Blue Book. That’s because automakers plan years ahead. They have already spent the money developing the turbochargers, lightweight materials, low resistance tires, and other tech they need to meet the current rules. They’re not going to change their carefully laid plans now.

That’ll keep the fumes away for a few more years, at least. But there’s better news for anybody worried about driving the Earth into climatic disaster: The electric cars—the ones that make the entire notion of miles per gallon outdated, the emission zero heroes—are still coming, thanks to two parties: China, and the millennials.

Let’s start with China. The country is already the world’s largest car market, buying about 23 million vehicles a year, and its appetite is growing by about five percent year over year, according to a McKinsey report. For automakers who have already flooded American streets with their wares, fresh territory is a vital resource. “The US [luxury] market in my view is going to remain relatively stagnant. It won’t decline, but it won’t grow,” Cadillac head Johan de Nysschen said this week at the New York International Auto Show. “The Chinese market, in the next 10 years, is going to triple.”

And China—where pollution is a serious problem—insists that any automaker doing business within its borders sell lots and lots of electric cars. That’s a big part of the reason why General Motors plans to roll out 20 new fully electric cars by 2023 and Ford is putting $ 11 billion into building 16 new models by 2022. Volvo is making its entire fleet “electrified” (a term that includes hybrids), and even Jaguar Land Rover, which debuted its first all-electric car just last year, says that by 2020, it will offer electric or hybrid versions of every car it makes. In an increasingly globalized industry, you can expect to see those models hit US and European shores as well—the more of each they sell, the faster automakers can amortize heavy R&D costs.

And the youths will help the process along. Right now, Lindland says, “the push to develop and deploy electric vehicles has been driven by regulations…consumers are not demanding these products.” Forcing people to change their habits—where, when, and how they fuel their vehicles—is hard. But that could change with the generation just now learning to drive. “I think people born after 2003 are those who will demand electrification,” Lindland says. “Those who haven’t bought a car yet. It’s not even a conversion.” Indeed, she says, that may help along China’s push for battery-powered cars. “They have more first time buyers at their disposal.”

Automakers play a very long game, and they know this new generation is coming. “As we see more millennials coming into the marketplace, companies are looking to strike a more efficient picture,” says Carla Bailo, CEO of the Center for Automotive Research. That means more electric cars, fewer emissions, and cleaner air.

So millennials—the kids who kill everything—along with whatever generation comes next, just might save the planet.


Charge!

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General Electric Capitulates Offering Interim Buying Opportunity
March 28, 2018 6:02 pm|Comments (0)

It has been one hell of a year for General Electric (GE) and its beleaguered shareholders. Bullish investors have suffered mightily watching their funds evaporate as the stock fell 65%, punishing anyone in the name.

Yesterday, the Wall Street Journal published a relatively bearish article that allowed traders to pile on to the downside with the stock breaking the $ 13 level and trading down to $ 12.70. That matched a low not seen since the heart of the financial crisis.

I read the article but did not see a real reason to spin it as a sell sign. There was no new news there. In my view, this is the type of situation that happens when a stock is capitulating and media outlets pile on, kicking a company when it is down.

As I watched GE hit $ 12.70, I thought to myself, is this company needing a loan from Warren Buffett? No.

Are we in a financial crisis with a contracting economy? NO.

Is sentiment as bad as I have ever witnessed in GE? YES. I then pushed the buy button and added to an upside down position with reservations.

Here are few questions for the average investor to keep it simple.

  • Are conditions better for GE now than they were in 2009? I think the answer is yes.
  • Does GE have more or less shares outstanding than 2009? It has less shares outstanding.

Here is a chart showing the share count for interested investors.

Source: GE macrotrends

As you can see, the share count was over 10B in 2009, it is now around 8.6B shares.

  • Is the global market in which GE operates in recession? No, as a matter of fact, the world economy is growing in sync for the first time in over a decade.
  • Is the negative news overdone? Are we dealing in reality or is the market trading on fear?
  • Is there a positive catalyst that can take the stock higher? That is a little more difficult question to answer. For me, the answer is maybe.

GE has been a huge disappointment for many years. There have been hundreds of articles over the last few months about GE and all of its problems.

I would like to take a moment to focus on Price and entry points.

What is GE worth?

Today, the stock is worth $ 13.32 a share as I write this article. Yesterday, it was worth $ 13.23 to $ 12.70. I think the sell-off is way overdone, but the fear factor is real, and the margin calls are real.

My downside price target of $ 12.80 was hit yesterday. To me, it is worth $ 12.70. I bought it yesterday from $ 12.71 to $ 12.92. I may sell the rally, trading around my position and trying to get out with my scalp. I think the stock is worth around $ 15 to $ 18 a share by June 2019.

Bottom line is this: GE is a global digital business. The stock price will vary from day to day. Sometimes, it will trade at a significant discount to the business and its underlying fundamentals.

In my view, $ 12.70 represents a value that will cause the bulls to step in and stage a rally that could last into earnings.

Here is a look at a 10-year monthly chart.

In looking at the monthly chart above, one can see the sell-off in 2008 and 2009 and the 10 years that follow. Very few traders in the markets thought the stock could go down and break $ 13, but I did.

I wrote an article back in January stating more capitulation to come. In that piece, I wrote that GE could break $ 13 after hearing about the $ 22B GE Capital bombshell. I set a buy target of $ 12.80 back then and decided to stick with my unemotional thesis based on behavioral finance.

Important Note: GE only traded under $ 13 for a few short months in 2009 when the financial world was burning down and fear was everywhere. It is a very different world now, and in my view, GE is going to be fine.

Is GE a buy three months later at $ 13?

Maybe, if there is evidence of a solid sustainable turnaround and the clouds of uncertainty are raised. Right now, uncertainty is everywhere. There are far better stocks to buy that are going up, stocks with great earnings growth.

Mario Gabelli was buying GE in January at $ 16.

Two months ago, Kevin O’Leary said he would buy it at $ 13.

Now, Mr. wonderful just said on CNBC that he wants to buy the stock at $ 7 to $ 8. I get it. I have done the same thing many times. However, the market makes all of us look a little silly at times, and while GE may hit $ 8 a share, in my view, it is highly unlikely.

It is normal behavior to watch a stock get way oversold on highly negative sentiment and not be able to pull the trigger; only to watch it go on a quick 15% to 20% sharp rally with you on the sidelines.

This type of arrogant attitude is bullish to me as it may embolden shorts which could help the stock rally near term. He says “it can go to $ 8 easily.” I disagree. That was the height of hysteria, and the reason it went to $ 5.65 was a fake news story about BK, which was false. I bought it that day and owned it on March 9th when the market bottomed with a cost basis of $ 8.28.

It might be better to put your money into financials like Bank of America (BAC) under $ 28 or Citigroup (NYSE:C) on weakness. They are both growing earnings and raising dividends. Rising interest rates will do wonders for their bottom lines. Apple (AAPL) is a cash-generating monster with a continuing revenue stream and great margins.

The market is ignoring any positive news coming from GE at the moment

The new $ 1.3T government spending bill will likely be a huge positive for GE going forward. It stands to make some great profits on all different types of defense spending, which is totaling $ 700B. That is extremely bullish for GE and its future, but when a stock is in capitulation, many investors cannot ignore the noise.

Look at this slide from a JPM presentation showing what it makes for defense spending. The market is missing the boat with GE and its prospects for the future, in my opinion.

Bear case

GE Capital is going to be a drag on earnings for years to come. The $ 22B hit that the company took on the last conference call scared the hell out of most investors, including me.

Margins are getting squeezed with profits down 88% in the power division.

GE pension problems are out of control. (I disagree).

The Alstom acquisition is a disaster, and it will never be able to make the business model work.

SEC headlines in regard to GE Capital will remain a risk to the stock.

Bull case

Extreme pessimism around the stock is a contrarian play. GE has intrinsic value, but the market is not giving any value to GE as a company. Enterprise value is how much? Zero? I am not an expert, but as a long-term trader, I would give the company a minimum value of $ 5 for enterprise value, and in my view, that is conservative.

Aviation earnings should do great as worldwide jet engine growth spending ramps up over time.

Earnings report on April 20th should be terrible

I am expecting an earnings miss and more write-downs on the next call. I expect nothing good to come out of energy this fiscal year. This may be the worst quarter of the year for GE. Any positive news and clarity around GE Capital could pop the stock 10% overnight. A major earnings miss and investors could see a sell-off that takes the stock to new lows.

Conclusion

GE is in the dog house, although today is the biggest rally day in many years. The stock has hit a capitulation level that I believe could launch an interim rally as bulls force short covering going into earnings.

The company’s share count is over 2 Billion shares lower than 2009. The global economy is buzzing along with synchronized growth. While GE has problems, the company is slowly working through its issues.

I am not bullish on the name but believe that an interim rally point may have been reached at the $ 12.70 level. Today’s trading activity is a good sign for beaten-down shareholders suffering under years of bad management.

April 20th is the next report card for GE. Investors will be looking for clarity on GE Cap. and free cash flow growth. I see GE going nowhere fast as this year will be a reset. While I am long the stock, I will be looking to exit and hedge on rallies.

An announcement of a big-time investor like Warren Buffett could pop the stock 5% to 10% in a heartbeat. Investors will be watching closely to see who the new whale is jumping into GE.

Short squeezes are the start of many individual stock rallies, and they can happen very quickly and keep going, wringing out shorts. From there, improving fundamentals can take a stock higher.

As always, I encourage investors to do their own due diligence and make their own decisions and always have an exit strategy in place before making any trades.

Disclosure: I am/we are long GE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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