general electric

Every Thursday we bring you “Our Top U.S. Stocks” as our daily post. In these posts, you’ll get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about covered in our newsletter on U.S. investing, Wall Street Stock Forecaster. “Our Top U.S. Stocks” is part of our new approach offering you regular buy, hold and sell advice in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday and on Friday, our advice on one of the stocks our Inner Circle members have asked about in their weekly Question & Answer sessions. GENERAL ELECTRIC CO. (New York symbol GE; www.ge.com) saw its shares drop from $42 in 2007 to under $6 in 2009, as the financial crisis caused big losses at its banking division. In response, the company decided to shrink this business’s assets to half of what they were before the recession. It expects to complete these cuts by the end of 2014....

SPDR S&P 500 ETF $197.12 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major in U.S. companies that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, IBM, Chevron, General Electric, Pfizer, Berkshire Hathaway, Verizon, Wells Fargo and AT&T. The fund’s expenses are just 0.10% of its assets.

If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.

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Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day, at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....

GE’s shares dropped from $42 in 2007 to under $6 in 2009, as the financial crisis caused big losses at its banking division. In response, the company decided to shrink this business’s assets to half of what they were before the recession. It expects to complete these cuts by the end of 2014. Meanwhile, GE is expanding its industrial operations, mainly through acquisitions. That’s generally riskier than internal growth, but these businesses have unique technologies that offer competitive advantages. GE has also entered into a new alliance with France’s Alstom that will help it expand in developing nations. GENERAL ELECTRIC CO. $26 (New York symbol GE; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 10.0 billion; Market cap: $260.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.ge.com) is one of the world’s largest manufacturers. It makes machinery for power generation and distribution, such as turbines, as well as other products, like jet engines, medical equipment, appliances, lighting and locomotives....

ADOBE SYSTEMS INC., $72.61, Nasdaq symbol ADBE, rose 9% this week after reporting better-than-expected quarterly results. In its fiscal 2014 second quarter, which ended May 30, 2014, Adobe earned $186.3 million, up 1.9% from $182.9 million a year earlier. Due to fewer shares outstanding, earnings per share rose 2.8%, to $0.37 from $0.36. That beat the consensus forecast of $0.30. Revenue gained 5.7%, to $1.07 billion from $1.01 billion. That also beat the consensus forecast of $1.03 billion....

GENERAL ELECTRIC CO. $26 (New York symbol GE; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 10.0 billion; Market cap: $260.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.ge.com) is one of the world’s largest manufacturers. It makes machinery for power generation and distribution, such as turbines, as well as other products, like jet engines, medical equipment, appliances, lighting and locomotives.

The company also operates GE Capital, which mainly provides loans to GE’s clients. The company scaled back GE Capital after the division suffered big losses in the 2008/09 financial crisis. It now accounts for 30% of GE’s revenue and 37% of its earnings.

As part of these reductions, GE Capital will soon unload its North American consumer lending business as a separate firm called Synchrony Financial (New York symbol SYF). GE will sell 20% of Synchrony’s shares through an initial public offering. After that, the company will give its shareholders the chance to swap their GE stock for Synchrony shares.

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NEWELL RUBBERMAID INC., $28.88, New York symbol NWL, makes a variety of everyday items, such as trash cans and food-storage containers. Aside from Rubbermaid, its main brands include Sharpie, Paper Mate, Waterman and Levolor. In the three months ended March 31, 2014, Newell’s sales fell 0.7%, to $1.23 billion from $1.24 billion a year earlier. That’s partly because harsh winter weather kept many shoppers at home. As well, the company had to recall infant car seats to fix defective seat belts. Newell gets about a third of its sales from outside the U.S. If you disregard the negative impact of currency exchange rates, sales rose 0.7% in the quarter....

The Schwab U.S. Broad Market ETF, $45.86, symbol SCHB on New York (Units outstanding: 67.4 million; Market cap: $3.1 billion; www.schwabetfs.com), aims to offer diversified exposure across large- and small-cap U.S. stocks. It tracks the roughly 2,500 stocks in the Dow Jones U.S. Broad Stock Market Index. The ETF has an MER of just 0.04%. It yields 1.8%. The index’s 10 highest-weighted stocks are Apple, Exxon Mobil, Microsoft, Johnson & Johnson, General Electric, Google, Chevron, Wells Fargo, Berkshire Hathaway and J.P. Morgan Chase....

SPDR S&P 500 ETF $187.75 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple, ExxonMobil, Google, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, IBM, Chevron, General Electric, Pfizer, Berkshire Hathaway, Verizon and Wells Fargo. The fund’s expenses are just 0.10% of its assets.

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LOBLAW COMPANIES LTD., $47.01, Toronto symbol L, has received approval from competition regulators for its acquisition of Shoppers Drug Mart Corp. (Toronto symbol SC), which operates 1,253 drug stores across Canada. To win approval for the purchase, Loblaw has agreed to sell 18 stores and 9 pharmacies. It does not plan to close any of its 1,000 supermarkets. Loblaw will pay roughly $12.4 billion in cash and shares for Shoppers when the deal closes on March 28, 2014. The price is equal to 93% of its $13.3-billion market cap. After the deal closes, Shoppers shareholders will own 29% of the combined company....