By Nigam Arora & Dr. Natasha Arora
JPMorgan (JPM) is long from $34.14. It is trading at $161.86 as of this writing. This represents a gain of 374%. JPM is the bluest of blue-chip banks. JPM is in the Model Portfolio.
JPM reported better than expected earnings but worse than the whisper numbers.
The company also pays a dividend of 2.42%.
Key Points
Here are the key points,
- The conference call was downbeat and caused the stock to go down.
- JPM said it will spend whatever it takes to compete. Investors did not like this comment.
- JPM sees expenses going up in 2022. Investors did not like expenses going up.
- Loan growth is muted.
- JPM is concerned about inflation.
- The company expects M&A to remain active in Q4.
- On the positive side, if interest rates go up and inflation goes up, JPM will benefit.
‘Buy Now’ Rating
For those following the ‘Good Way,’ the ‘Buy Now’ rating is ‘NO.’
Zones
For those following the ‘Best Way,’ the buy zone is $133.11 to $147.21. The very long term target zone is $205 to $220. The recommended position size is 20 – 40%.
What To Do Now
Those in JPM may consider continuing to hold.
Those not in the stock may follow the parameters given above.
Cautions
- JPM, BAC, and C are large money center banks. There are reasons to own all three of them.
- If you have a large portfolio, it is appropriate to buy JPM, BAC, and C. However make sure you are comfortable with a position size of all three combined.
- If you have a small portfolio, consider owning only one of the three. C has the most upside potential.
- If you do not own any of these banks and can own only one, C is the best choice at this time.
A special note to new subscribers: If you are not yet ready for the sophistication of the site and the ‘Best Way’, consider starting with the ‘Good Way.’ Please study Getting A Running Start and Trade Management Guidelines. Please note that this is a very long term position. The plan is to accumulate more if the stock goes down, ultimately up to 100% of full core position size.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
