Michael Decter JP Morgan Chase & Co JPM-N TOP PICK Oct 16, 2018

Financial sector offers great promise, though it's reacted to current markets by pricing in a potential recession. Slower economic growth would not be good for banks. Absent a recession, with consumer confidence returning and unleashing M&A, the sector provides a good opportunity.

Don't value it on PE. Instead look at price to book, and it's expensive at 1.8x. Less expensive options include BAC and C.

Strongest broad-based financial. One of his larger positions.

Very efficient, with the lowest overhead ratio and highest ROE of all competitors. Very strong balance sheet, and it's very liquid. Should outperform peers in any type of economic environment. Stock's pulled back on tariff uncertainties about 17% from its highs, now trading ~12.5x forward PE. Increased dividend last week. Yield is 2.42%.

High quality. Globalization is starting to move in a different direction, so this option provides a more domestic focus.

Will benefit from the strong US economy and interest rates.

Buy the leader. Strongest on the way up, most resilient on the way down. Best bank in the world. Global financials represent the most clearly defined leadership theme in the market right now.

Among the banks, they've done the best with their digital strategy, close to MS. They stay abreast of what's happening in fintech and adapt that for their customers/users.

A new purchase (June) for the portfolio. Global scale. Quite possibly the best bank in the world. Its smaller wealth management business is a focus for growth. Increasingly, scale matters in banking; secular shift away from regional banks. 

Abundant organic growth opportunities, so it pays out a modest 25% of earnings in dividends. Outperforms the Canadian big 6, a rare feat. Robust earnings and dividend growth, compounding ~13% over the last decade. Yield is 1.99%.

All the US financials have done pretty well, which is a good reflection on the potential of the economy. Her core US bank stock. Great long-term hold. For new $$, wait for a pullback; on down days, you can start to average in. Very well run, lots of excess capital. Plans to grow US presence.

Is the biggest and best of the money centre banks, but trades at 2.2x book value vs. Citi's 0.7-0.8x book. Citi was punished but is under a new CEO. Citi is less exposed to international markets and that volatility. Numbers are showing positive. He likes both. But JPM is fully valued though continues to do good things. The other is a little riskier, but more potential upside.