Tracking a stock can sometimes be fun...

If you think a company and its stock can be tracked only through pure financial valuation, think twice about it.... Analysts are innovating new means to track the the company and its stock. London-based analysts for Morgan Stanley tracked GE’s stock price against the number of times Chairman Jeffrey Immelt and Chief Financial Officer Keith Sherin use the word “great” or “greater” in investor calls. And the results are interesting and found in this article in the WSJ.

So the next time your own CEO talks watch out for the signals......

The analysts found that incidence of “greatness” rises, so does GE stock. The analysts dub their tool as the “greatometer.” In the third quarter 2002 call, for example, Messrs. Immelt and Sherin used the word “great” just over 20 times. By the second quarter 2005, the word appeared about 70 times in an hour-long conference call. Over that period, GE’s shares rose 37%, to $36.38, from $26.65. (The analysts tracked the average price of GE stock in a quarter.)

Then, Messrs. Immelt and Sherin cut back on their use of “great” for a while; in the call following the third quarter of 2006, the word was uttered only 37 times. And GE stock fell 10% over the period, to $32.70. Following the dip came a great rebound. On Jan. 18, when GE reported its results for the fourth quarter of 2007, there were roughly 80 incidences of greatness, including the “great company,” the “great quarter,” the “great momentum,” and the “great risk management,” according to a transcript by Thomson Financial. Shareholders were feeling great, too: GE shares traded at an average of $40.16 in the fourth quarter.

A GE spokesman prefers to accentuate the positive. “That’s great, great, great news for GE investors,” he says of the index.

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