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09/19/14 04:20:59 PM
WORD ON THE STREET

General Electric Company, The Fresh Market, Inc., Concur Technologies, Inc.

General Electric Company(GE) : General Electric Company's (NYSE: GE) faltering share price spurred an analyst recently to revive the call for its break up, saying investors would be more comfortable with a "pure play" infrastructure company. GE, founded in 1889 by none other than Thomas Edison with help from the Vanderbilt family and the investment bank Drexel Morgan & Co., had its day as a member of the 1960s' and 70s' "Nifty 50" and the 20-year reign of "The Jack Welch Premium" that ended in 2001. But recently, "most investors have given up on the story," Barclays' Scott R. Davis said in a note calling for "an AT&T style break up." Shares of the Fairfield, Connecticut-based mega cap conglomerate are down more than 6 percent year to date versus a gain of more than 4 percent for the Dow Jones Industrial Average, of which GE was an original member in 1896. Diversified conglomerates as a business model became especially fashionable in the post-war period partly on the notion that a downturn in the demand cycle of one industry could be offset by upturns in another. Notable of the day examples included Gulf+Western and ITT Corp. But the practice began to fall out of favor in the 1970s as high interest rates ate into profits and the notion of "core competency" became a new mantra. Talk of breaking up GE has been around for a long time, surfacing most recently a half-dozen years ago when earnings hit a rough patch during the financial crisis. Barclays' Davis thinks times are ripe again for divestitures. "GE needs to consider a full, AT&T-style breakup," Davis said. "Investors are comfortable with GE becoming a pure play global infrastructure company but want that defined more narrowly." The company recently exited its consumer appliance business and sold its remaining holdings NBC Broadcasting only last year. Scott said next on the list should be GE Capital which he said creates volatility, politcal issues regarding its tax structure and added risk in the event of financial downturns. Enthusiasm for spinning off the GE Medical unit is gathering momentum and Scott likes the idea. "There's an urgency felt among its shareholder base for GE to make changes," according to Scott, who rates GE at Overweight with a $32 target. GE traded recently at $26.32 per share, up 0.42 percent. View More Analyst Ratings for GEView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



The Fresh Market, Inc.(TFM) : Wolfe Research upgrades The Fresh Market, Inc. (NASDAQ: TFM) from Underperform to Peer Perform, according to Bloomberg. View More Analyst Ratings for TFMView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



Concur Technologies, Inc.(CNQR) : Concur Technologies, Inc.'s (NASDAQ: CNQR) agreement to be acquired for $7.36 billion by SAP SE (NYSE: SAP) could drive the share value of competitors, a number of analysts said Friday. The deal could touch off "another consolidation wave" among subscription software providers, according to Oppenheimer's Brian Schwartz. Germany-based SAP agreed Thursday to pay $129 per share for Concur, a 20 percent premium on Bellvue, Washington, Concur's September 17 closing price. The deal is expected to close by early 2015. Analysts Friday promptly produced their respective laundry lists of merger candidates in the sector. Evercore's Kirk Materne speculative list included Ultimate Software Group Inc., which gained 0.5 percent Friday afternoon, Cornerstone OnDemand Inc., down more than 1 percent and Demandware Inc. up 0.2 percent. Additional companies that could be subject to related takeover speculation according to Credit Suisse's Michael Nemeroff: Textura Corp down 1 percent Friday, Callidus Software Inc. unchanged and Synchronoss Technologies, Inc., down 2 percent. Besides SAP, potential buyers in the supposedly pending wave of mergers according to Oppenheimer's Schwartz may includeOracle Corporation, International Business Machines Co. and Microsoft Corporation. View More Analyst Ratings for CNQRView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



 

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