Dow 30 Stocks List: 15 Stocks Ranked By 2022 Hedge Fund Bullishness Index

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

Number of Hedge Fund Holders as of Q3, 2022: 110

JPMorgan Chase & Co. (NYSE:JPM) operates as a financial services company worldwide. On December 6, Morgan Stanley analyst Betsy Graseck upgraded JPMorgan Chase & Co. (NYSE:JPM) to Overweight from Underweight with a price target of $153, up from $126, noting that the bank’s operating leverage is inflecting positively in 2023, driven by revenues up 10% year-over-year and expenses up 9%.

At the end of the third quarter of 2022, 110 hedge funds in the database of Insider Monkey held stakes worth $6.4 billion in JPMorgan Chase & Co. (NYSE:JPM), compared to 104 in the preceding quarter worth $5.8 billion.

Vltava Fund commented on JPMorgan Chase & Co. (NYSE:JPM) in a 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.