GE Strategically Acquires Iders To Boost Portfolio Offering

Industrial manufacturing giant, General Electric Company’s (NYSE:GE) GE Transportation recently acquired electronic product design and manufacturing company Iders Incorporated, for an undisclosed amount.

Iders offers rail products, contract product development services, and contract electronic manufacturing services across Canada. It is the manufacturer of GoLINC, an onboard processing, storage, networking, and communications platform that essentially converts a locomotive into a mobile data center. GoLINC is a platform on which General Electric and others companies write applications to enable smooth functioning of the train and the entire system.

Post acquisition, General Electric will be well positioned to innovate the latest technologies and provide its customers the best–in-class experience. This deal will help the company set itself apart from its peers. Customers will be able to access a wider portfolio of cost-competitive digital solutions. In addition, the company will also inherit Iders’ current product development projects to improve productivity.

In addition to such opportune acquisitions, General Electric is pruning its operating portfolio to focus on core manufacturing businesses with a digital edge. It has outperformed the Zacks categorized Diversified Operations industry driven by a string of strategic acquisitions and collaborations with an average return of 3.9% compared with 2.8% of the latter, over a period of 30 days. Also, in the last one year the company’s revenues have risen considerably.

During the third quarter, GE Transportation acquired ShipXpress, a premier provider of cloud-based software solutions, for an undisclosed amount. The deal is likely to expand General Electric’s Transportation portfolio and enrich its human capital as it will gain nearly 200 industry, technical, and software development experts who have been providing their services to ShipXpress. The amalgamation of ShipXpress’ innovative software products and General Electric’s advanced sensing technology will further help enhance the Predix platform of the latter. Such successive acquisitions are likely to further improve the company’s revenues in the forthcoming quarters.

We continue to be bullish on this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in this industry include Leucadia National Corporation (NYSE:LUK) , Macquarie Infrastructure Corporation (NYSE:MIC) and Mitsubishi Corporation (OTC:MSBHY) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Leucadia has a long-term earnings growth expectation of 18%. It has beaten estimates only once in the trailing four quarters for an average earnings surprise of 179%.

Macquarie Infrastructure has beaten estimates twice in the trailing four quarters for an average positive earnings surprise of 29.6%.

Mitsubishi has long-term earnings growth expectation of 15% and is currently trading at a forward P/E of 10.6x.

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