Diamonds and Dogs

3/14/19

General Electric (GE) on the right side of the roller coaster ride again. GE is up 3% back to a one month high after an Investor Day call this morning. GE is calling 2019 a reset year and expects free cash flow to return in 2020 and accelerate in 2021. GE will pay down $12 billion of debt in 2019-20. The plan is to bring debt below $30 billion by 2020. This results in a forecasted ending 2020 cash balance of at least $6 billion. GE has no plans for long term debt issuance until 2021 and no plans for commercial paper usage going forward.

Tailored Brands (TLRD) not so tailored. The parent company of Men's Wearhouse and Jos. A Bank is down 24% to a 52 week low following earnings. The earnings were not bad as sales fell 8% to $785 million. But the company proceeded to lower guidance for the first quarter to $0.10-0.15, excluding non-recurring items, vs. $0.51 estimates. As one analyst said, it was a terrible call as business is challenged and is getting worse, visibility seems very low and management seems to be questioning the execution of some of their strategies. The analyst put the stock "in the penalty box" until management can show some stabilization in their business.