You are not tracking epicadv.
This stock is also in epicadv's Watchlist
| Symbol | Sector | Return | Exposure | Trades | Last Trade | Status |
|---|---|---|---|---|---|---|
| JPM | Banks | -8.15% | n/a | 33 | 14-May-09 | Prior Holding |
03-Aug-08
JPM Investment Analysis
Holding Rationale for JPM.
Valuation Completed: 8/2/08
Rating: Neutral
Comments: The banking industry is shaping up to be the stories of the haves vs. the have nots. Certain banks are well capitalized, adequately reserved and possess discipline managements. The others have weak management teams, low credit reserves and are capital restrained. To me, you would like to buy the strong and either avoid or short the weak.
JPM is one of the strong. They possess one of the best management teams in the industry, have ample capital and strong credit reserves. As a stress test, I assumed that JPM would suffer a 10% loss on their unrated wholesale lending business and 7% losses on their consumer portfolio. This would result in a total loss of $19B versus current recognized credit losses of $14B ($4.5B YTD charge offs and $9.5B of consumer reserves). While the loss would be large, the bank would still be well capitalized.
Assuming a pending $5B write down, I derive a $45 target price based on multiple valuation methods. With a current earnings' yield of 3.63%, one could make a rational argument that this stock should trade closer to $55. For me, I will use $45 as my target price and would like to buy the stock at a 20% discount to fair value. Therefore, I would look to initiate a position near $36.
Tagged Stocks: JPM
Posted at 07:35 in Holding Rationales | Permalink | Top
Propping Continues ...
The markets are all hovering higher today.
Dow, Nasdaq and ...
StocksHaven
Zignals Trading Str...
It was another good day for bulls with the Nasdaq 100 perhap...
fallond
Europe's Stragglers...
FRANKFURTNike AIR Force 1—Greece and Europe's other intensiv...
yuanxian03
If you're looking t...
Here are some ideas about what the latest trends are for p...
sammy10
Categories
Holding Tags
Watchlist Tags
Other Stock Tags
Archives
0 Comments on "JPM Investment Analysis"
You must be logged in to post a comment.
Top