What If You Were Responsible for JP Morgan Chase Business and Stocks?

The JP Morgan Chase & Co stock seems to be a rare gem of a Financial Sector stock. The September 25 2008 stock price crossed $43. The price was well under $30 not so long ago. The Price to Earnings Ratio remains comfortably below 15. The Forward Price to Earnings Ratio is slated to fall below 11. What distinguishes this stock, and are investors right in their support of the iconic Money Center Bank?

Purchase of a peer in distress seems to have triggered contrary stock price movement. Is the JP Morgan Chase & Co management right in its appraisal of the Washington Mutual business? I do not think so.

JP Morgan Chase & Co has earned less than 1% on Average Assets during the last one year. Who can be sure how much the assets may be worth in reality? What if the Fed selectively bails out competitors who take more profitable risks? The Payout Ratio of JP Morgan Chase & Co is more than twice the norm for its industry. This raises questions about the long-term commitment of the management.

I can point you to stocks with better sensitivity profiles to their Forward Price to Earnings Ratios. Do not follow the stock market herd. Write to me at drsbanerji@gmail.com to know more.