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Last quarter, New York Stock Exchange suffered a big decline the day the multinacional conglomerate General Electric (stock ticker: GE) posted an unexpected 6% fall on their quarterly profits. GE stock fell 13% after this disappointment.

 Today, General Electric posted their 2Q 08 (second quarter) results, that matched the analysts´estimates. Profits from continuing operations fell 4% or 54 cents a share, reaching a profit of $5,61 billion. Sales rose 11% to 47 billion dollars, beating the expert´s expectations. This last fact will probably play favourably in today´s GE trading day; on early trading, General Electric Co. was rising 0,50% to 27,74.

Jeffrey Immelt, the company´s CEO, agreed to sell a consumer-lending operation plant in Japan for $5,5 billion, and said he was satisfied with Ge´s performance.

GE has a PER (price over earnings per share) of 12.5, quite an attractive figure for such an important company. Good margins, constant growth and tremendous background are some facts that makes GE a quite stable and trustworthy investment. Dividend yield of 4,5% is quite high for a big firm.

Warren Buffett says that stocks should be bought when they suffer from unpopularity in the market. Today we have this opportunity with the only company out of the twelve stocks of  the Dow Jones Industrial Average that still exists. This means that since 1896 General Electric has been pioneer in the economy, with growing dividends and sustained quality.

We believe that GE should be bought since it will probably recuperate its value when this crisis is over. And today we have a good entry point opportunity.

Nevertheless, General Electric has a medium/low volatility and it should not be bought if the investor isn´t going to keep it for at least 15 months. In the following chart we may see the high decline this stock has suffered:

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This said, for a long term investment that isn´t looking for high risks, General Electric is a very good option. GE is only on the last months a temporary decline, but it´s more than 110 years of history guarantees that they will recover. Earning dissapointments of big companies historically provocate the best moments to buy them.