Stock market »

Financials are Poised for Further Upside

David Becker
Share on StockTwits
Published on

Banks notched up solid earnings, and JPM is poised to move full steam ahead. JP Morgan Chase and Co. (NYSE:JPM) a financial holding company, provides various financial services worldwide.

There has been a lot of news recently surrounding the leadership of JPM. Warren Buffett, chief executive of Berkshire Hathaway said if he owned J.P. Morgan he would keep Chief Executive James Dimon at the helm and would pay him even more than he’s making now. On Friday, the bank disclosed in a filing that Mr. Dimon received a 74% jump in compensation in 2013, a year in which J.P. Morgan agreed to more than $20 billion in legal payouts and posted its first quarterly loss since the financial crisis.

The 52-week range of JPM is $ 46.05 – $59.82, and the stock hit a fresh 52-week high in January. Earnings increased 4% in the latest quarter and the 3-year growth rate of earnings positive 13%. Sales were down 3% quarter over quarter and the three-year growth rate of sales was flat. The company has a very attractive dividend yield of 2.8% and a robust profit margin of 25.5%.

Recent insider buying makes the stock look attractive. Steven Cutler, the General Council at JPM purchased 500K shares of the company stock on both the 16th and 22nd of January for a total value of 25 million dollars. Additionally, Daniel Pinto and John Donely both officers of the company purchased nearly 5 million dollars each of the stock on the 21st and 22nd of January. There have been no insider sales during January 2014.

The technical shows a stock with negative momentum that is declining after a robust run in January. Support is seen near the 100-day moving average near $54.50 which should hold. The MACD is printing in negative territory reflecting negative momentum on the stock price. The RSI (relative strength index) which is an oscillator that measures momentum along with overbought and oversold levels is printing near 38, which is in the lower end of the neutral range. The accumulation distribution line declined with the price of the stock show low volume with the decline.

Share on StockTwits