5 Stocks to Buy Amid Rising Interest Rates

1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 101   

JPMorgan Chase & Co. (NYSE:JPM) is a financial services company. On January 18, Barclays analyst Jason Goldberg kept an Overweight rating on JPMorgan Chase & Co. (NYSE:JPM) stock with a price target of $200, noting that an earnings beat in the fourth quarter of 2021 and higher than expected net interest income had offset some of the negatives for the company that included higher tax rates and less share buybacks. The analyst noted that investments would help JPMorgan Chase & Co. (NYSE:JPM) maintain higher returns in the coming months. 

JPMorgan Chase & Co. (NYSE:JPM) is a leading bank stock on Wall Street, evidenced by the bullish hedge fund sentiment around the firm. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. (NYSE:JPM), with 7 million shares worth more than $1.1 billion. 

In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:

“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”

You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.

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