NEW YORK (Reuters) - Portfolio manager Michael Kon began buying General Electric Co shares about a year ago and got more last fall after GE Chief Executive Larry Culp outlined plans to reboot the ailing power-plant unit.

The logo of U.S. conglomerate General Electric is pictured at the company's site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler

“I wouldn’t say that they’ve got their arms around it,” Kon, who is also research director at investment firm value-oriented Golub Group LLC, said of the power trouble.

“But at least they’ve identified all the issues.”

Culp has a chance to attract more investors by providing greater clarity on GE’s strategy when he and other GE leaders lay out their 2019 financial forecast on Thursday.

Wall Street analysts expect GE to earn 70 cents a share this year and generate $1.9 billion in free cash flow, on average, according to data from Refinitiv.

GE optimists, spurred by Culp’s actions, have fueled a 53 percent rally from the stock’s low in December. As the first outsider to head the 127-year-old conglomerate, Culp has cracked open GE’s books to more scrutiny, shaken up its board and stationed new leaders in trouble spots like power and insurance.

But Culp still faces many skeptics who dumped the stock as GE racked up staggering losses of more than $30 billion over the last two years and cut its dividend to near zero.

The camps are unusually divided: Of 19 analysts who cover the company, nine rate its stock “hold” or “strong sell” while 10 rate it “buy” or “strong buy,” according to Refinitiv.

MURKY OUTLOOK

Those views did not change much even after GE reported a $22 billion loss in January or told investors last week its industrial businesses will lose cash in 2019.

GE shares are down 15 percent since Culp took over in October, and they are worth less than a third of their value in 2016.

Some analysts count Culp’s candor as positive and say the cash flow warning shows serious investment in restructuring.

But others say the changes have clouded GE’s outlook and want Culp to paint a credible picture of its future.

GE’s strategy of selling assets to pay off its outsized debt, for example, is ditching some of its most cash-generative businesses, such as rail and biopharma, said John Inch, analyst at Gordon Haskett Research Advisors. GE’s power unit has cut 12,000 jobs and 30 percent of facility space but plans to spend more on restructuring this year, he added.

“Just exactly what are you doing in power with all that restructuring money?” Inch asked.

GE’s forced asset sales also mean GE is not getting good prices, said Oliver Pursche, chief market strategist at Bruderman Asset Management LLC.

Investors who buy GE stock thinking it is cheap are ignoring cash outflows, strategy uncertainty and the fact that GE cannot afford to pay a dividend.

“The reality is, it’s at $9 for a very good reason,” said Pursche, who’s firm sold when GE cut its dividend in 2017 and won’t buy until the dividend returns and the outlook is clear.

“Until you get a cohesive growth strategy,” he said, “there’s no compelling reason to invest.”