5 Stocks to Buy According to Francis Chou’s Chou Associates Management

In this article, we discuss 5 stocks to buy according to Francis Chou’s Chou Associates Management. If you want to read our detailed analysis of Chou’s investment philosophy and performance, go directly to 10 Stocks to Buy According to Francis Chou’s Chou Associates Management.

5. JPMorgan Chase & Co. (NYSE:JPM)

Chou Associates Management’s Stake Value: $3,309,000
Percentage of Chou Associates Management’s Portfolio: 1.76%
Number of Hedge Fund Holders: 110

JPMorgan Chase & Co. (NYSE:JPM) provides financial services to clients worldwide. Berenberg analyst Peter Richardson raised JPMorgan to Hold from Sell on July 18 with a price objective of $120. In the first quarter, Chou Associates Management sold 10,000 shares of JPMorgan Chase & Co. (NYSE:JPM), reducing its remaining stake by about 30%. At the end of the quarter, the hedge fund still held 24,275 shares of JPMorgan Chase & Co. (NYSE:JPM), worth about $3.31 million, representing 1.76% of its portfolio.

Hedge funds are piling into JPMorgan Chase & Co. (NYSE:JPM). At the close of Q1 2022, Insider Monkey found 110 hedge funds long JPMorgan Chase & Co. (NYSE:JPM), up from 107 funds in the previous quarter.

Here is what Ariel Investments had to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter:

“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.

“In our view, inflation will not just be a 2021 phenomenon.”

Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”