Monday, December 21, 2009

Big Opportunity In JPMorganChase (JPM)

A couple of key points I wish to review today are the yield curve and the Barrons' Report this weekend on bank stocks.

As for the yield curve, more specifically the spread on the 10 year/2 year note is at 2.80% as of today (chart is of Friday). The Treasury yield curve, a barometer of the health of the U.S. economy, widened to a record as investors bet an accelerating recovery will fuel inflation and hurt demand for unprecedented sales of government debt. >>READ FULL STORY

The next story is from a Barrons' Report this weekend pointing out that 4 banks stocks offer huge opportunity. One of Itz Pix has been JPMorgan Chase (JPM).It may have the clearest path to higher profits, the strongest management and one of the industry's best business mixes. JPM trades at 1.6 times tangible book, JPMorgan controls about a third of the American deposit. Price-to-tangible book is a conservative valuation measure because the book value excludes goodwill from acquisitions and other intangible assets. Banks look even cheaper, based on stated book, which includes goodwill and other intangibles. JPMorgan trades for little more than its stated book value of $39 a share.

No comments: