JPMorgan Chase & Co. (JPM): Cramer Says To Use Any Weakness To Buy Bank Stocks
We recently published an article titled, 11 Stocks on Jim Cramer’s Radar Right Now. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against other stocks on Jim Cramer’s radar right now.
In his recent episode of Mad Money, host Jim Cramer focused on the upcoming market events, emphasizing the importance of new consumer price index data alongside a series of reports as the earnings season kicks off.
Cramer pointed out that the Labor Department’s nonfarm payroll report revealed significant job growth in September, surpassing expectations. He highlighted the significant rally in stocks on Friday, a response to better-than-expected job creation figures. The U.S. economy added 254,000 jobs in September, significantly exceeding Wall Street’s estimate of 150,000. Additionally, there were upward revisions for the previous two months, with 72,000 more jobs reported for July and August combined.
Despite his initial expectation that stocks would decline as bond yields surged, Cramer noted the resilience in the market. He observed that people seemed to feel relief, thinking that a major economic downturn was not on the horizon, which prompted a flurry of buying activity in the stock market. He added, “Maybe we aren’t headed toward a landing at all.” He described the situation as quite unusual and, in his view, “quite exciting”.
He mentioned that on Wednesday, the Federal Open Market Committee will publish notes from its last month’s meeting, which could clarify the central bank’s bold choice to cut interest rates by 50 basis points. According to Cramer, Wall Street is rife with speculation about the Federal Reserve’s future actions, especially following strong labor statistics released last Friday. As speculation swirls around whether the next cut will be 25 or 50 basis points, Cramer leaned towards the belief that it would likely be 25 or nothing at all. He added:
“Then again, what really matters is the overall direction for rates, and that direction is most definitely lower, which is bullish for stocks.”
He also mentioned that Friday would bring the producer price index report, which, like the consumer price index, will serve as a critical indicator for the Fed’s upcoming decisions. Cramer commented:
“Here’s the bottom line: a market that appreciates good news, like a robust job creation number, is a market that can handle, well, let’s just say, the historically tough month of October. After today’s performance, all I can say is so far so good.”
Our Methodology
For this article, we compiled a list of 11 stocks that were mentioned by Jim Cramer during his episode of Mad Money on October 4. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
JPMorgan Chase & Co. (NYSE:JPM): Cramer Says To Use Any Weakness To Buy Bank Stocks
JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 111
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based global financial services company that runs through various segments. The Consumer & Community Banking (CCB) segment provides deposits, loans, and payment services to consumers and small businesses.
The company’s Corporate & Investment Bank (CIB) offers investment banking services, including advisory and capital-raising solutions, along with securities services. Meanwhile, the Commercial Banking (CB) segment serves small and midsized businesses, local governments, and corporations with lending and investment banking.
Finally, the Asset & Wealth Management (AWM) segment delivers investment management and financial services to institutional clients and high-net-worth individuals. As of June 30, 2024, JPMorgan Chase reported assets totaling $4.1 trillion, with stockholders’ equity amounting to $341 billion.
Cramer mentioned the company and said:
“We do have an onslaught of financial earnings in the morning. We’ve got Wells Fargo, JPMorgan, and BlackRock. I think the banks represent the least expensive group in the market which means you need to use any weakness to buy them.”
In the second quarter, JPMorgan Chase (NYSE:JPM) achieved a net income of $18.1 billion, or EPS of $6.12 on revenue of $51 billion. The revenue represented an increase of $8.6 billion or 20% compared to the previous year.
The company also announced an increase in the quarterly common stock dividend from $1.15 to $1.25 per share for the third quarter. It is payable by October 31 to the shareholders of record on October 4. The stock has a dividend yield of 2.37%, as of October 4.
Overall, JPM ranks 2nd on our list of stocks on Jim Cramer’s radar right now. While we acknowledge the potential of JPM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.