Diamonds and Dogs

10/16/15

GE's future is looking brighter. Thanks to better than expected earnings, GE continued its momentum today rising 3% to a new 52 week high reaching levels not seen since before the 2008 financial crisis.  Besides the better than expected earnings, GE is making a lot of moves to improve shareholder value by spinning off or selling nonindustrial businesses to focus on aviation, energy, transportation and health care, marking a return to GE's manufacturing heritage and a shift away from financing. Thanks to all these moves, CEO Jeffery Immelt expects to return approximately $30 billion to share owners in 2015. Not bad.

The railroads continue to lag thanks to weak demand for commodities and oil. Kansas City Southern (KSU) dropped 10% to a new low following disappointing earnings. The company's energy segment saw some of the biggest declines, with commodities losses totaling 7% year over year. The railroads were on fire the last several years transporting oil all around the country, but demand has slacken even as production continues to remain robust. Hopefully things will turnaround for the railroads in the coming months.