JPM’s Investor Day

JPMorgan Chase (JPM) is having its investor day today. TheStreet notes that Wall Street loves the stock. JPM has 28 “buy” ratings and five “holds.”

JPMorgan stands to benefit from every facet of economic growth, ranging from higher consumer spending to a buoyant equity market. However, the recent quarterly performance was bolstered by a net decrease in credit reserves to $33 billion. Although JPMorgan’s investment-banking revenue decreased 21% during the quarter, hurt by higher expenses, the bank ranked No. 1 for global fees. In contrast, the bank’s real estate portfolio produced a quarterly net loss of $823 million, an improvement from the $1.7 billion loss in the year-earlier quarter, but still a sign of weakness. JPMorgan boosted its allowance for loan losses on the Washington Mutual credit-impaired loan portfolio to $2.1 billion. JPMorgan bought WaMu in 2008.

JPMorgan’s diversified approach, particularly its retail and small-business exposure, is proving a superior strategy to the capital-markets exclusivity of Goldman Sachs (GS). Furthermore, loan modifications and amplified lending to small businesses has helped JPMorgan, which, like most too-big-to-fail institutions, accepted funds from the Troubled Asset Relief Program, or TARP, to restore its public image faster than peers. However, a recent suit against the company, alleging it complied in Bernie Madoff’s Ponzi scheme, has taken a PR toll as has admission that the bank wrongly overcharged thousands of military families, with members serving overseas, on their mortgages and improperly foreclosed on more than a dozen.

In the morning news, we pointed out that Marriott (MAR) is planning to split itself into two companies. I like to see when good companies split themselves up. Investors can often find good deals.

Recently, Motorola split itself into Motorola Mobility (MMI) and Motorola Solutions (MSI). I’ve written before that I highly doubt either company will keep Motorola in their names. Also, I think MSI will probably be the stronger performer.

Posted by on February 15th, 2011 at 8:34 am


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