Diamonds and Dogs

2/25/19

General Electric (GE) spinning off more businesses. GE is up 8% to a four month high after agreeing to sell their biopharma business to Danaher for $21.4 billion. Even though some thought the biopharma business was the "crown jewel" for GE's healthcare unit, shareholders are happy today. This move is a big step toward GE's goal of deleveraging its $121 billion debt load by selling part of its fast-growing life sciences division. GE's bonds are reacting well to this move. GE was expected to IPO their health care businesses this Spring, but that deal is on hold. Danaher (DHR) is also up 8% as one analyst called the acquisition a "multi-year home run."

McDermott (MDT) one of the few stocks trading lower today. The engineering and construction company is down 5% not far from a 52 week range following disappointing earnings. The company missed on earnings and sales due to significant non-recurring charges, including those related to goodwill and deferred tax assets. The company expects the first quarter will likely to be the softest quarter of the year and that operating performance in the second half of 2019 is likely to be stronger than the first half. The company did reiterate guidance for the full year.