Barron’s observations October 17 2015

Excluding the news summaries, there have been three table-pounding endorsements of JPMorgan (JPM) in the last few days; first two were in the print edition, the third online.

1: Fund manager Chris Davis’ review of financial stocks recommends JPM, with the quote: “Jamie Dimon may be the greatest financial executive of my time.”

2: The Follow-Up column revisits an earlier recommendation of JPMorgan:

JPMorgan looks as good as it did six months ago at the time of our cover story. Under CEO Jamie Dimon, the bank has invested in key businesses and is a leader in investment banking, credit cards, and asset management. It is also looking to trim expenses.

At the current price, investors get a best-of-breed bank, with a management team that arguably is the industry’s best,”

3: “A Mega-bank selling at a discount price” on October 15 online.

JPM is at 62 now, yielding 2.8%. Great.

jpm 10 years

This performance almost identically tracks Wells Fargo, which is the other “well managed” money center bank. Heck there are really only four now, and let’s accept as a given that Citi and Bank of America were less well managed.

JPM v. WFC

But I can never get excited about these things. The Jaime Dimon-is-a-superb-manager seems to be one of the very non falsifiable managerial propositions. Maybe it’s not falsifiable because it is true. But a _great_ manager would have steered clear of the financial crisis. A better-than-others just avoids bankruptcy better than others. I’m not excited about this and feel when JPM is so regularly getting the drum beaten at Barron’s (which also had an article enamored of regional banks) my gut says pass.

 

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Coverage of the Dell buyout of EMC was a bit lazy spread out through the magazine – recommending that one could make 19% on an arbitrage over the deal. Not if VMWare ($69) continues to dive, a possibility only lightly explored in that article but was visited elsewhere.

There was a decent piece on the tower operators for cell phone companies, focusing on AMT ($96), CCI ($81), SBAC ($110): perhaps beneficiaries instead of victims of Google Fi/Fiber rollout (not mentioned in the article) as well as the national emergency system. Central contention from Alexander Eule is AT&T can’t let quality degrade more so fears overblow.

 

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