1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
P/E Ratio as of January 20: 11.15
JPMorgan Chase & Co. (NYSE:JPM) is a financial services company that operates through four segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. On January 13, JPMorgan Chase & Co. (NYSE:JPM) announced that it expects to resume stock buybacks this quarter and called $12 billion a “good number” for stock repurchases in 2023. JPMorgan Chase & Co. (NYSE:JPM) is one of the most undervalued bank stocks to monitor.
On January 17, Citi analyst Keith Horowitz raised the firm’s price target on JPMorgan Chase & Co. (NYSE:JPM) to $165 from $150 and reiterated a Buy rating on the shares. The company’s updated guidance and latest earnings commentary helped alleviate the analyst’s concerns on expenses and capital. The analyst sees upward revisions to consensus estimates.
According to Insider Monkey’s Q3 data, 110 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM), compared to 104 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a significant position holder in the company, with 7.5 million shares worth $788 million.
Here is what Vltava Fund has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q3 2022 investor letter:
“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.
JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.
A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”
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