JP Morgan Chase & Co (JPM)

Banks earnings happen next Wednesday: JPM, Goldman, Wells Fargo and Citi. He expects good reports from all. The expected increase in M&A will benefit all. These stocks are off their highs at very low PEs. He's been buying them.

Likes US financials, sector is underowned. Financials will benefit from US pro-business policies, less regulation, and more M&A activity. 200-day MA is going higher, and price is above that. 200-week MAs are starting to turn up. 

See his Top Picks.

Regulators and politicians like the CEO, so JPM gets good deal when the banking sector faces challenges, like picking up assets at an attractive price. Have the best credit profile; their credit cards outperform. The dividend grows at 7%.  If US interest rates don't decline a lot, then load demand will drive JPM's business.

No real growth. The banks each take their turn to shine, and you want to buy them at different times.

It's the best bank in the world, boasting size and scale and trading at 2x book, which is historical expensive.

His choice in US banks, though it trades at a higher PE. The CEO has been doing a spectacular job. He also likes BAC for its management.

Incredibly well run. Better opportunities than others because it has other businesses that don't rely on interest rates, such as credit cards and investment banking. Bigger and better than others, able to do more M&A as well.

In the space, he prefers bricks & mortar and steady-eddy banks that are diversified coast to coast. In the US, he owns this one. Well capitalized, has done well.

The question was on his preference of this group of wealth management companies. He owns all three for different reasons. The possible lack of regulation under the new administration has already boosted them. They are in excellent financial shape and have good dividend growth. It is not an expensive sector.

He just bought more JPM before the vote (not covered calls) and reaped the rally. He's writing calls now and next week.

This is his biggest bank position. Leader in the sector. Best technology, balance sheet, and management (though you can't have somebody forever). Wonderful business. Bullish backdrop for financial services. Up 10% today, so could pull back. Buy a bit, buy more on a pullback. Won't get badly hurt with this one.

She's going to increase her position in this to get more US banking growth exposure.

Her core US bank holding. Share price has gone up, but earnings have been growing. Company sees consumer doing OK in a pretty strong economy. Increasing loan provisions slightly. Net interest margin coming off a bit with interest rates being cut, but JPM sees that pivoting next year. 

Very high ROE of 16%, very high operating efficiency. Very strong balance sheet. CEO prefers liquid cash on the balance sheet instead of bonds, which allowed them to buy First Republic. She's increased her weighting.

Peer-leading multiple, around 14x earnings. Very well run. Likes it, but valuation keeps him away. For new money, hunt for more value.

His top choice in the space, one of his top 5 holdings. We're into an easing cycle on rates. What's working in the market are early cycle companies, rather than late cycle. Likes financial services in general.