This isn’t your grandfather’s General Electric (GE).
The major industrial manufacturer is quickly becoming a key player in the oil services industry. During the past decade or so, GE went from “almost nothing” in oil and gas to investing more than $15 billion on expansion in the past few years. The firm makes a host of equipment needed to produce energy — including sub-sea trees and pumps — and as GE Oil & Gas posted a 16% year-over-year jump in revenue for 2012.
It also continues to add to its arsenal.
The latest buyout of artificial lift and pump-jack manufacturer Lufkin Industries (LUFK) will make oil & gas GE’s third-biggest unit. Given just how big global energy demand is getting, GE could be putting itself into a sweet spot for the future. Pickens is positioning himself well, too, by adding a 10,000-share stake in the industrial manufacturer.
If GE continues to rid itself of its troubled finance arm and goes back to “building things,” investors could be handsomely rewarded.