Bull’s Eye Report: JPMorgan Chase (JPM)

Buy JPM at current levels

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Why We Like The Stock:

JPMorgan Chase & Co. (NYSE:JPM) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) that has pulled back while maintaining a positive technical set-up. Like other big-bank heavyweights Citigroup (NYSE:C) and Bank of America (NYSE:BAC), JPM has been a strong performer since the summer of 2012. Large funds seem to be rotating into big financials in 2013, so snagging up these stocks on pullbacks seems like a good bet.

JPM recently hit $51, which represents the short term upside of this trade. At current prices, JPM is slightly above its 50-day moving average and continues to base above $48.

Another attractive aspect of buying a big bank like JPM here is the situation in Cyprus. There is chatter that the EU would levy a “bail-in” mechanism on accounts  over 100,000 Euros, meaning that large deposit accounts would be subject to a tax of sorts should the respective bank find itself in trouble. Just the thought of such a tax is likely to put off large depositors, so it is possible that we could see an influx of capital into large U.S. banks who don’t employ such policies. It is purely speculation at this point, but worth sharing. We like JPM at current prices as long as it holds above support at $47.61.

We Would Be Buyers:

At the current price (~$48.65).

Company Profile:

JPMorgan Chase & Co.  is a financial holding company. The company is a global financial services firm and a banking institution in the United States, with global operations. The company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, N.A., a national bank with the United States branches in 23 states, and Chase Bank USA, N.A., a national bank that is the company’s credit card-issuing bank. JPMorgan Chase’s non-bank subsidiary is J.P. Morgan Securities LLC, the company’s the United States investment banking firm. In June 2012, JP Morgan’s asset management business created a new unit.

Stock Rating: 7.5

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

JPMorgan Chase – Last Three Months

JPM 1 Bull's Eye Report: JPMorgan Chase (JPM)

JPMorgan Chase – Last 12 Months

JPM 2 Bull's Eye Report: JPMorgan Chase (JPM)

JPMorgan Chase – Last Five Years

JPM 3 Bull's Eye Report: JPMorgan Chase (JPM)

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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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