General Electric Company (GE), Pall Corporation (PLL): Warning Signs for the Industrial Sector?

As for General Electric Company (NYSE:GE) its healthcare, transportation and aviation (which together contributed 61% of industrial profits in the quarter) should do fine this year, but its power & water division disappointed last time around (Europe was blamed), and it’s hard to read what its oil & gas numbers will be for the rest of the year. Both companies’ future results are well worth looking at in this context.

Where next for Pall Corp?

Pall Corporation (NYSE:PLL) is attractive, and it has some good long term prospects from filtration demand promulgated by environmental regulation. My concerns would be more over the short to mid term outlook. This is a stock that trades on nearly 23x full year EPS estimates to July 2013. It is hardly cheap and its outlook has been getting worse even as the share price has risen.

Clearly the market is pricing in a second half industrial recovery here with no knock–on effects from China’s shifting growth path. Even if you are comfortable with these scenarios then Pall Corporation (NYSE:PLL) does not look cheap.

Lee Samaha has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company.

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