Diamonds and Dogs
General Electric (GE) shining bright. GE is leading the Dow higher today following news activist, Nelson Peltz and his Triad Fund invested $2.5 billion in the industrial conglomerate. The activist put together an 80 page report of what changes they'd like to see at GE to get the stock moving higher once again. Good news for shareholders, but maybe not for management.
The one sector still not participating in the recent rally is biotechs. Valeant Pharmaceuticals (VRX) is lower by 10% today after dropping 12% last week. The stock is lower today after Barron's over the weekend questioned their accounting and valuation. In the article Barron's stated Valeant trades for 16 times non GAAP earnings, but 65 times GAAP earnings. That's a big discrepancy and a good reason for investors to step back and let the dust settle.