Goldman Sachs’ List Of Stocks That Hedge & Mutual Funds Love & Hate: 28 Stocks On The Mutual and Hedge Funds Radar

19. GE Aerospace (NYSE:GE)

Number of Hedge Fund Holders In Q2 2024: 86

Category: Most popular with HFs and underweight among mutual funds

GE Aerospace (NYSE:GE) is the aerospace and defense spin out of the industrial equipment giant General Electric. The firm’s stature in the industry along with its sizeable resources as evident through cash and equivalents of $12 billion mean that it operates at the forefront of one of the most capitally and technologically intensive industries in the world. GE Aerospace (NYSE:GE) also operates in the commercial aviation industry, and the turmoil falling out from Boeing’s production woes has also impacted the firm. Yet, it has benefited from business diversification, as while lower aircraft production has led to slower jet engine demand, GE Aerospace (NYSE:GE) has been able to cater to the growing industry demand for spares, refurbishment, and after sales service. The firm also benefits from heightened global political tensions which ensure that governments continue to spend on defense products to remain prepared for conflict.

During the Q2 2024 earnings call, GE Aerospace (NYSE:GE)’s management shared insights on how it’s experiencing a changing business environment because of commercial aviation disruptions:

“No, no, you’re right. I mean, we had a good second quarter on orders. We had a good first half. I mean services orders were kind of, as you said, mid-30s for the second quarter, up 30% or so for the first half. Strong book-to-bill here in the first half of the year on top of a good book-to-bill we saw in 2023. So the momentum is definitely there on the services side. And as you look at the back half of the year, we are expecting the services growth to be a little bit higher in the second half than in the first half, right, both the shop visits and on spare parts on a year-over-year basis. So we delivered 9% internal shop visit growth in the first half of the year. And if you look at our low to mid-teens guidance on shop visits, that would imply that shop visits will be closer to high teens in the second half of the year on a year-over-year basis.

So that’s what we are projecting. But overall, it’s mid-teens services growth, and that is consistent with what we think the future years will look like. I think that we had – when we look at our 2025 outlook, we were projecting continuous strong services growth. So it’s good to see the strong orders growth, good to see, as Larry said earlier, LEAP gaining share on the overall air traffic departure side as well.”